International Finance Corp To Buy 5.6% Share In JK Tyre For $30 Mn

JK Tyre and Industries announced on Wednesday that World Bank Group member IFC will invest USD 30 million (approximately Rs 240 crore) in the business to acquire a 5.6 per cent stake in order to fund the expansion of energy-efficient tyre manufacturing.

According to a regulatory filing, IFC's investment in JK Tyre and Industries will help to finance the expansion of manufacturing capacity and the integration of advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres with improved safety and longevity.

Following that, the International Finance Corporation (IFC) will retain a 5.6 per cent stake in the tyre giant through the preferential issuance of compulsorily convertible debentures (CCDs).

“The investment aims to strengthen the company's capital structure and increase production of energy-efficient radial tyres by more than 10 per cent – from 32 million to more than 35 million tyres per year by 2025,” JK Tyre and Industries stated.

This is consistent with the national vision of a self-sufficient India and a strong emphasis on industrial employment creation, according to the statement.

On the investment by IFC, JK Tyre and Industries Chairman and Managing Director Raghupati Singhania said, “This investment will be utilised for the expansion of projects, which are not only growth-oriented but are also committed to promoting sustainable development and enhancing societal value creation.”

“Innovation and technology are at the heart of each of our products, keeping us ahead of the curve to meet our customer's needs,” he added.

“As a leading green tyre manufacturer with a demonstrated focus on sustainability, our partnership with JK Tyre and Industries will drive capacity expansion and scaled manufacturing of energy-efficient tyres through resource-efficient tech, low carbon solutions and circularity,” said Wendy Werner, Country Head of IFC India.

IFC aims to catalyse further investments and market competitiveness by signalling a long-term view of the industry, and thus help India's goals of becoming both self-sufficient in domestic manufacturing and a global manufacturing hub, Werner added.

JK Tyre and Industries claims to be one of the top 25 manufacturers in the world, with 12 internationally benchmarked'sustainable' manufacturing facilities – nine in India and three in Mexico – producing approximately 32 million tyres per year.