India Nippon Electricals Ltd., a two-wheeler components maker, plans to expand capacity and build a factory after winning an order from the local unit of Honda Motor Co., a person with direct knowledge of the matter said.
The company, 20 percent owned by Japan’s Kokusan Denki Co., will spend 400 million rupees ($7.2 million), including 150 million rupees on the plant scheduled to start production of motorcycle alternators by the end of March, the person said, asking not to be identified before a public announcement.
The vendor to TVS Motor Co. will also boost capacity at its facilities located in the states of Haryana, Tamil Nadu and in the union territory of Puduchery to meet demand in the South Asian country. The Society of Indian Automobile Manufacturers, an industry body, expects two-wheeler sales in the country to rise as much as 13 percent in the year ending March 31, after climbing 14 percent in the previous 12 months.
Shares of the company rose 2.6 percent to 180.50 rupees as of 11:39 a.m. in Mumbai. The stock has risen 20 percent this year, compared with a 15 percent gain in the benchmark Sensitive Index, according to data compiled by Bloomberg.
India Nippon, based in the southern city of Chennai, offers ignition system solutions and makes parts including regulators, rectifiers, flywheel magneto and coils used in two- and three-wheelers.
The component maker will start supplying 4,000 alternators a day to Honda Motorcycle & Scooter India Pvt. from the new factory, the person said. A spokeswoman at Honda’s local unit declined to comment on the order.