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Informist, Wednesday, Mar. 25, 2026

 

--HFCL, promoters to invest up to INR 1.75 bln in arm HFCL Advance Systems 

--HFCL to raise INR 5.55 bln via issuance of 75 mln convertible warrants 

 

NEW DELHI – HFCL Ltd. Wednesday announced the expansion and consolidation of its defence business through an investment of up to INR 1.75 billion in non-material wholly-owned subsidiary HFCL Advance Systems Pvt. Ltd. "The initiative brings together complementary capabilities across aerostructures, aeronautics, radar systems, and advanced thermal weapon sight solutions under one unified platform," the company said in an exchange filing. The expansion provides the company with a confirmed export order book of around INR 15.70 billion and a domestic order book of INR 1.10 billion.

 

HFCL Advance Systems will act as a platform for the consolidation of multiple businesses in the defence sector. It will acquire 100% stake in Spiral EHL Engineering Ltd., an engineering and precision manufacturing company, which in turn will acquire the aerostructure and aeronautics business of Defsys Solutions Pvt. Ltd.

 

Additionally, HFCL Advance Systems will acquire its parent's 80% stake in Raddef Pvt. Ltd., a radar technology company. HFCL Advance Systems will also acquire HFCL's thermal weapon sight business. HFCL will have manufacturing facilities in Gurugram and Bengaluru following these acquisitions. The company will hold 51% in HFCL Advance Systems after the proposed arrangements go through.

 

HFCL expects the transaction and changes to enable its entry into the aeronautics and aerostructure segment that has "significant" entry barriers due to stringent qualification requirements, long approval cycles, and limited supplier ecosystems. Additionally, it expects its capabilities in design, prototyping, precision manufacture, and system integration to strengthen as it moves towards higher value-added offerings within the defence and aerospace value chain.

 

The transactional agreements are expected to be executed by May 31 while the closing under these transactional documents is expected to be completed in 2026, HFCL said.

 

BACKWARD INTEGRATION

HFCL's board Wednesday approved the setting up of a preform manufacturing facility through its wholly-owned subsidiary HFCL Technologies Pvt. Ltd., it said in a separate exchange filing. The company will invest INR 5.80 billion for the preform facility which would lead to a capacity addition of around 300-310 tonnes per annum. 

 

"The decision to establish a Preform manufacturing facility is driven by the sharp and sustained growth in demand for optical fibre cables, which has resulted in constrained supply conditions for optical fibre," the company said, adding that the availability of optical fibre is directly dependent on the uninterrupted supply of preform in required quantities. 

 

HFCL is also considering a further increase in its optical fibre manufacturing capacities over and above the expansion already underway amid a sustained and significant increase in demand for optical fibre cables, it said in a statement. 

 

WARRANTS

With these capital-intensive initiatives underway, along with other initiatives, the company's board also approved issuing up to 75 million warrants, each convertible into one equity share of the company, to the promoters and promoter group at an issue price of INR 74 per equity share, aggregating to INR 5.55 billion, subject to approval from shareholders at its extraordinary general meeting on Apr. 24.

 

"The proposed fund raise is aimed at strengthening the Company's balance sheet and enhancing financial flexibility as HFCL enters a phase of accelerated growth and strategic investments," it said in a separate exchange filing. 
 

For the December quarter, HFCL had, on a consolidated basis, reported a net profit of INR 976.2 million on a revenue of INR 12.11 billion. Wednesday, its shares closed 1.9% higher on the National Stock Exchange at INR 70.93.  End

 

Reported by Anand JC

Edited by Rajeev Pai

 

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