Kheria Autocomp plans Sanand-II plant after capacity constraint

Kheria Autocomp Limited plans a Rs 65.17 crore plastic-moulded auto-components plant at GIDC Sanand-II after its existing Sanand unit reached 93.73% capacity utilisation in FY 2025-26. The company had deployed Rs 25.21 crore by September 2026 and intends to use Rs 39.96 crore of net IPO proceeds for the project in FY27.

Why is Kheria Autocomp building a Sanand-II plant?

Kheria Autocomp is building the Sanand-II plant because its existing Sanand unit was operating near capacity and lacks adequate space for additional machines. In FY 2025-26, the unit produced 5,061.45 metric tonnes, or MT, against installed annual capacity of 5,400 MT, according to a capacity-utilisation certificate dated August 10, 2026.

Kheria Autocomp manufactures plastic injection-moulded automotive components and assemblies for the passenger-vehicle market, including products used in electric vehicles and internal-combustion-engine vehicles. The company describes itself as a Tier-I supplier, meaning a supplier serving the automotive production chain, and says it manufactures products to designs and specifications provided by Tier-I vendors that supply original equipment manufacturers, or OEMs.

The capacity position changed materially over three financial years. Installed capacity was unchanged at 4,200 MT in FY 2023-24 and FY 2024-25, before increasing to 5,400 MT in FY 2025-26; production rose by 1,846.45 MT over the same period.

Capacity utilisation in FY 2025-26 was 17.18 percentage points above FY 2023-24, although it was 5.17 percentage points below FY 2024-25 after the capacity increase. Kheria Autocomp says the new unit will expand manufacturing capacity for existing products, rather than describing a new product category or diversification plan.

How much will Kheria Autocomp spend on the Sanand-II plant?

Kheria Autocomp estimates the Sanand-II project cost at Rs 65.17 crore, based on a cost-vetting report issued by D&B dated August 18, 2026. By September 2026, the company had deployed Rs 25.21 crore, or about 38.7% of the estimated project cost, leaving Rs 39.96 crore to be funded through net fresh IPO proceeds in FY27.

Land represents Rs 8.10 crore of the project cost and had been fully deployed by September 2026. Civil construction is estimated at Rs 23.34 crore, of which Rs 14.44 crore had been deployed, while injection moulding machines carry an estimated cost of Rs 19.01 crore, with Rs 75 lakh deployed and Rs 18.26 crore remaining.

Auxiliary equipment is budgeted at Rs 5.95 crore, while material handling, electrical infrastructure, office and administration setup, spare parts and consumables, and contingency together account for Rs 8.77 crore. The contingency provision is Rs 2.57 crore, and Kheria Autocomp says costs above the estimate and available contingency would be met through internal accruals and/or debt from existing or future lenders.

The prospectus states that the proposed deployment of net proceeds has not been appraised by a bank, financial institution or independent agency. The company may revise, reduce or extend its deployment schedule in response to vendor quotations, market conditions, issue timing, economic conditions, business requirements and other factors, with unutilised amounts potentially deployed in the following financial year.

What will Kheria Autocomp build at Sanand-II?

Kheria Autocomp will build a manufacturing facility on a 15,900-square-metre industrial plot at Plot E-560, GIDC Sanand-II Industrial Estate, Village Rasulpara, Taluka Sanand, Ahmedabad. The company took the land on a 99-year lease from Gujarat Industrial Development Corporation, or GIDC, under an agreement dated February 4, 2025.

The proposed development has 13,579.88 square metres of built area, including 9,966.24 square metres of ground-floor built-up area and 5,901.26 square metres of open space. The prospectus also describes a factory building of about 13,585 square metres, with a 13.5-metre height and about 13,255 square metres of floor-space-index area for machine operations, raw-material storage, finished goods and assembly activities.

Kheria Autocomp plans to install 11 automatic injection moulding machines, ranging from 230 tonnes to 1,100 tonnes of machine tonnage. The planned mix comprises one 230-tonne machine, one 350-tonne machine, one 450-tonne machine, two 650-tonne machines, three 800-tonne machines and three 1,100-tonne machines.

The company has issued purchase orders for 100% of injection moulding machines, while quotations cover 100% of auxiliary-equipment requirements and purchase orders have been placed for most auxiliary machines. The auxiliary systems include dehumidifiers, water coolers, chillers, compressors, scrap grinders, cooling towers and robots, which support the moulding process rather than directly producing components.

When does Kheria Autocomp plan to start production?

Kheria Autocomp plans to begin commercial production and order fulfilment at Sanand-II in January 2027. The schedule requires construction completion, machine delivery and installation, utility commissioning, recruitment, trials, customer audits where applicable, and IATF certification before the planned operating start.

The implementation plan lists roofing, flooring, doors, painting, electrical fit-outs and plumbing fit-outs for October 2026. Machine delivery and installation, staff hiring, crane safety testing, air-compressor safety testing and electrical connection are scheduled for November 2026, while training, machine calibration, sample runs, tool proving and SAP implementation are scheduled for December 2026.

Kheria Autocomp has received GIDC building-plan approval, Gujarat Pollution Control Board consent to establish, and water connection for the project. The remaining approvals listed for December 2026 include the factory licence, consent to operate, stability certificate, effluent-treatment-plant and sewage-treatment-plant approvals, generator approval and lift licence.

The January 2027 timeline therefore depends on the stated December 2026 approvals and completion of equipment and utility work. IATF certification, an automotive quality-management certification, is also scheduled for January 2027, meaning commercial production must coincide with completion of a regulatory, operational and quality-readiness sequence.

What could alter Kheria Autocomp's funding or timetable?

Kheria Autocomp says actual project costs may differ from current estimates if vendor quotations expire, suppliers change or market conditions change. Although the company has disclosed purchase orders for injection moulding machines and several auxiliary systems, it also states that it is yet to place orders for components proposed to be financed from net proceeds.

The company says no part of the net proceeds will be used to acquire second-hand machinery or equipment. It also says no net proceeds will be paid to its promoters, promoter group, directors, key managerial personnel or senior management, and any surplus after the stated project requirements may be used for general corporate purposes subject to applicable limits.

General corporate purposes cannot exceed 15% of gross proceeds or Rs 10 crore, whichever is lower, under the disclosed Securities and Exchange Board of India regulations. Any material variation in the issue objects requires shareholder approval through a special resolution, while Kheria Autocomp is required to disclose use of net proceeds to its audit committee on a half-yearly basis.

Conclusion

Kheria Autocomp's Rs 65.17 crore Sanand-II project is linked to a documented production constraint, with its existing unit operating at 93.73% utilisation in FY 2025-26 after producing 5,061.45 MT. The project is already partly executed through land acquisition and civil work, while injection moulding machines form the largest remaining spending category at Rs 18.26 crore.

The next disclosures to watch are the October to December 2026 construction, installation and approval milestones, followed by the planned January 2027 commercial start. The principal unresolved matters are pending statutory approvals, final procurement costs for items funded from net proceeds and whether the project remains within the Rs 65.17 crore estimate.