Daikin Industries, Japan’s top air-conditioning company, has made a substantial investment of Rs 1,400 crore in its Indian arm. This marks the company’s largest investment in India to date, focused on ramping up local production of both finished goods and key components, as per The Economic Times.
Investment Breakdown
According to recent filings by Daikin Airconditioning India with the Registrar of Companies (RoC), the capital infusion was carried out in two stages: Rs 600 crore in June, followed by Rs 800 crore in August. This funding has raised the subsidiary’s paid-up capital to Rs 1,582.9 crore. In addition, Daikin expanded its authorised share capital from Rs 1,500 crore to Rs 3,000 crore earlier in May, signaling further growth plans for the future.
The filings indicate that the increase in authorised share capital will help drive the company’s ongoing expansion efforts, which include the second phase of its factory at Sri City, Andhra Pradesh. Additionally, this move is expected to reduce the company’s interest expenses.
Strategic Focus on Localisation and Expansion
KJ Jawa, Chairman and Managing Director of Daikin Airconditioning India, shared that the funds will be allocated to expanding manufacturing capabilities, particularly for components like compressors. Daikin aims to raise the localisation level of its air conditioners from 75% to nearly 90%, solidifying its role in India’s Production-Linked Incentive (PLI) scheme for the air-conditioning sector.
Jawa highlighted that the Rs 1,400 crore investment will be used for infrastructure development, research and development, skill training, brand building, and operational improvements. The company plans to fully leverage its 75-acre Sri City facility, which includes a compressor and component manufacturing plant, to stay competitive. Daikin India operates in the Rs 30,000 crore Indian air-conditioning market, competing with prominent players such as Tata-owned Voltas, LG Electronics, and Havells-owned Lloyd.
