Mahansaria Tyres Private Limited (MTPL) will set up a $107-million facility to manufacture off-highway tyres in Gujarat, backed by International Finance Corporation (IFC) through equity and loan.
IFC will provide a loan of up to $30 million and it will buy a stake in MTPL for up to $7.74 million.
MTPL is owned by Ashok Mahansaria, Yogesh Mahansaria and Yogesh Investments Private Ltd. (YAIPL), erstwhile sponsors of Balkrishna Industries and Alliance Tyre Group, and it has over 25 years of experience in off-highway tyres used in agriculture and construction industry.
Cost for phase 1, which will involve setting up 40,000 MT capacity, is $107 million.
This will be funded by debt of up to $54 million, including IFC’s loan, which will have a tenor of 10 years.
IFC will also mobilise another loan of up to $24 million on similar terms.
This gives the company access to a different fundraising channel — from institutional financiers — and help it develop a more diversified investor base.
MTPL estimates exports to account for 70-80 per cent of sales and contribute to India’s forex earnings.
This project will demonstrate the competitiveness of Indian players in the global market and increase the overall share of Indian value brands, added reports.