New Delhi : EPACK DURABLE PVT. Ltd., India’s second-largest contract manufacturer of room air-conditioners (RACs), is raising a $40 million round led by private equity fund Afirma Capital, said two people requesting anonymity.
He said the company is looking to invest capital in brownfield and greenfield projects to take advantage of the production linked incentive scheme for RAC, as it plans to increase capacity to 3.6 million units by next year. In its last round of funding in September 2021, it raised $24 million from ICICI Ventures.
At its facilities in Dehradun and Bhiwadi, ePack manufactures RACs, components and small home appliances for leading Indian and foreign brands. The company has an installed capacity of over 24 lakh RACs and 10 lakh small home appliances. It is focusing on further expansion of capacity and backward integration for components.
One of the two people mentioned above said it plans to set up a new manufacturing unit in South India to serve the Southern and Western markets. Apart from serving the domestic market, there are plans to increase exports, he added. The greenfield manufacturing facility is being set up in Sri City, Andhra Pradesh, and is expected to be operational by next year.
The company is also planning to increase the capacity at its facility in Bhiwadi, which will be made operational by the end of this financial year.
“The penetration of RAC in India at 7-8% of households is the lowest in the world. Over the last two decades it has been building manufacturing capacity for RAC as well as small home appliances. It has built strong business relationships with all the major brands. The fresh funding from Affirma Capital will help the company expand its manufacturing and R&D capabilities, thereby increasing market share over the next 4-5 years.”
The company manufactures both window and split ACs. Its home appliances portfolio includes induction cooktops, mixer grinders and water dispensers. “As access to ACs and home appliances grows, it is well positioned for significant growth,” he added. The company posted revenue of more than 900 crore in FY22, and aims to double it 1,700 crore in this financial year, he said. Voltas contributes 35-40% of its revenue in the RAC segment, he said.
Email queries to EPACK and Affirma Capital did not elicit any response at press time.
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