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Aiming high on global market

Aiming high on global market

With its entry into the public market with an IPO, Precision Camshafts Ltd is aiming big on the global market in the coming years.

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Precision Camshafts Ltd is one of the world`s leading manufacturer and supplier of camshafts, a critical engine component in the passenger vehicle segment. They supply over 150 varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications from their manufacturing facilities in Solapur, Maharashtra.

Precision Camshafts Ltd is promoted by Yatin Shah and Dr. Suhasini Shah, who have over 20 years of experience in the critical engine component manufacturing and have established strong business relationships with marquee global OEMs. The company promoters are first generation entrepreneurs who started the business of manufacturing of critical engine component in 1992.

Global presence

Majority of their revenue comes from export of camshafts to various OEMs directly and indirectly. The company has a long term relationships with several major global OEMs, such as General Motors, Ford Motors, Hyundai, Maruti Suzuki, Tata Motors and Mahindra and Mahindra. As of March 31, 2014, the company has supplied over 50 million units of camshafts in the last ten fiscals and have serviced various customers across different geographies including the US, Brazil, the UK, Germany, Austria, Hungary, Russia, South Korea, China and India.

Precision Camshafts Ltd has recently won the awards for `Best Overall Exporter` and `Best Manufacturer Exporter` from Dun and Bradstreet India at the Export Credit Guarantee Corporation of India Ltd Indian Exporters` Excellence Awards under the medium exporters category in March 2015.

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Manufacturing set up

Currently, the company has two state-of-the-art manufacturing facilities – an EOU unit and a domestic unit – both situated at Solapur, Maharashtra. The EOU unit consists of four foundries and two machine shops and products manufactured at the EOU unit are primarily exported to its overseas customers. The domestic unit consists of one foundry and one machine shop and cater to domestic customers from this manufacturing facility. Total manufacturing capacity as on December 31, 2014 was 13.38 million camshaft castings per annum from its foundries and 2.22 million machined camshafts per annum from its machine shops.

consolidating market

In order to strengthen business operations in Asia, the company has entered into two joint ventures with Ningbo Shenglong PCL Camshafts Company Ltd (NSPCL), for machining of camshafts and with PCL Shenglong (Huzhou) Specialised Casting Company Ltd, for setting up a foundry in China. The machine shop at Ningbo, China commenced production in April 2013 and the foundry at Huzhou City, China is currently under construction.

Precision Camshafts Ltd continues to invest in technologies, designing capabilities and research and development activities. The company uses different technologies in its engineering and manufacturing operations including shell sand moulding process technology, special (AI203/ ceramic sand care) technology and GBQII process technology which provides them a cost competitive advantage among competitors. It also has a dedicated design and development team of nine engineers along with a well equipped inspection laboratory and a calibration laboratory. The company has also entered into an exclusive agreement with EMAG, a German machining and tooling process company for transfer of certain know-how and technology in order to strengthen its foray into assembled camshafts and expand business operations in the European market.

PCL goes public
Precision Camsh

afts Ltd has filed Red Herring Prospectus (RHP) with the Registrar of Companies (RoC). The offer consists of fresh issue aggregating up to Rs 2,400 million and an offer for sale of up to 9,150,000 shares of face value Rs 10 each. The Issue opens on January 27, 2016 and closes on January 29, 2016 and the price band is fixed at Rs 180-186 per equity share.

The Book Running Lead Managers to the issue are SBI Capital Markets Ltd, HDFC Bank Ltd and IIFL Holdings Ltd. The registrar to the issue is Link Intime India Pvt Ltd. The equity share being offered are proposed to be listed on the National Stock Exchange of India Ltd and BSE Ltd.

The objects of the net proceeds of the fresh issue are establishment of a machine shop for ductile iron camshafts at the export oriented unit (EOU) and the general corporate purposes.

On the occasion of announcing the IPO, Yatin Shah, Chairman & Managing Director, Precision Camshafts Ltd, spoke to APF as he said, We wanted to achieve the larger share of the market in the next 3-4 years. Once we reached there, we will leverage that to enter into other product lines which are equally niche. So the focus is going to be niche products, high value and technology. We wanted to become a global engineering company meeting critical needs.”

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In order to come to the top level in the global market it is important to have the right approach to compete with the leaders. Yatin Shah points out, “What needs to be come out with is world class technology and make that technology affordable with the OEMs without compromising on the process, quality and technology. It should be how you can provide that product at a better price from India. We will match world-class quality in our products but will offer a cost arbitrage.”

For the company, this is a new beginning towards achieving its goal in the coming years as Yatin Shah sums it up, “For me this is a completely new beginning and I look forward to exciting times ahead.”

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