Shares of JK Tyre and Industries Ltd skyrocketed 10% on 22 May after the company announced an investment of Rs 1,400 crore in Passenger Car Radials (PCR), Truck and Bus Radials (TBR), and All Steel Light Truck Radials (ASLTR) tyres in phased manner over the next two years to accommodate the consistent growth in demand from automakers in the upcoming quarters.

The project will be funded through a mix of debt of around Rs 730 crore and the remaining through equity and internal accruals. 

During the financial year 2024, JK Tyre issued a Qualified Institutional Placement (QIP) for Rs 500 crore for upcoming capital expenditure (capex).

Raghupati Singhania, Chairman and Managing Director (CMD), JK Tyre said, “The investments of Rs 1,400 crore will be completed in the next 18-20 months.” 

Raghupati added, “Once deployed, our PCR capacity will be increased by another 16% over and above our current capacity. TBR are very marginal.”

The tyre manufacturer has a total capacity of 34 million units per annum, of which 15 million are PCR, 4 million are TBR, and the remaining comprises TBB, Two/three-wheelers, etc. 

As per Singhania, the company is planning to invest more than Rs 1,000 crore to enhance its PCR capacity and an additional Rs 380-390 crore to boost the manufacturing of TBRs and OTRs (Off the Road). He also hinted about the company’s upcoming sale of aftermarket tyres made especially for SUVs.

The domestic tyre manufacturer invested Rs 800 crore in capacity expansion and product development during the previous fiscal year.

At 3:30 pm, the shares of JK Tyre closed 4.77% higher at Rs 423.80 on NSE.