Shivam Autotech stock rallied as the company planned to expand capacity. As much as 95% of the company's sales are directed to Hero Motocorp.

Shivam Autotech has invested about Rs 220 crore in Haridwar plant till now and will invest another Rs 50 crore for capex to cater to the expansion this year, said managing director Neeraj Munjal.

Here is the edited transcript of Nanda’s interview to CNBC-TV18. Also watch the accompanying video.

Q: Could you walk us through your expansion plan?

A: We have put up a new facility in Haridwar since our main customer Hero MotoCorp has invested in the new plant in Haridwar. We got a good volume advantage from our customers.

We have put up a state of the arch plant having high speed for hot forging and cold forging machine. Because of the volumes, we could get this technology from Switzerland, Belgium and Japan. We got a 40% increase in our business since last year.

Q: What other capex plans have you lined out?

A: Till now, we have invested about Rs 220 crore in Haridwar plant. This year, we will invest another Rs 50 crore. There is quite good amount of pull coming from the market for the two-wheelers.

Q: How are you investing in this additional capex? Where are the funds coming from?

A: We will take debt for the investment and some of it is our own funding.

Q: When will this plant get commercially operational? When will you be able to supply to Hero MotoCorp from this?

A: This plant is already operational since 2009. Since last two years, we have been seeing good growth out of this plant. This was basically because of the high speed machinery for catering to high volumes.

As Hero MotoCorp has put up this plant, it is incentive from government for income tax and excise. So, we will have benefit of income tax.