New Punjab plant to roll out 3 million bicycles: Tube Investment

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26 Aug, 2025 12:21

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Tube Investments has set up a greenfield bicycle manufacturing plant in Punjab at an investment of Rs 105 crore. This is the company’s fourth plant in India.The total installed capacity for the plant is three million bicycles, says the company’s chairman MM Murugappan. Initially, the company will roll out one million units from this plant.These bicycles will be for domestic sale, especially in North and East India.The company grew by 12 percent last year and is anticipating 8-10 percent growth in FY17, says Murugappan, adding, there are no plans for demerger as of now.   Below is the verbatim transcript of MM Murugappan’s interview with CNBC-TV18's Varinder Bansal.Q: We heard that you will be doing an investment of over Rs 100 crore to set up a new plant for bicycles. Two things I want to know. First is how much the installed capacity do you anticipate will increase with this plant and second is the volume growth you anticipate going ahead. You did around 14 percent in FY16?A: We will be inaugurating a new plant which will be our fourth plant in India and this will be set up in Rajpura near Mohali in Punjab. The capacity of this plant at full production will be about 3 million bicycles per annum. We will start with 1 million bicycles and progressively increase it to about 3 million bicycles largely for domestic markets serving certain geographical regions in the north and eastern parts of India but we will also sell pretty much all India.Q: How much volume growth do we anticipate going ahead?A: At this point in time the bicycle market in India is rather flat in terms of numbers, but what is happening which is quite unique is that the bicycle market is getting segmented into regular roadster bicycles and progressively into performance bicycles and it straddles the segments or age groups of almost 2-4 years old to up to 60-70 years old, each one for a different purpose.Last year we grew by a little over 12 percent and we anticipate a growth by a further 8-10 percent this year.Q: You have manufacturing business and you have the financial service business. Don't you think about having financial services business and manufacturing business as separate entities going ahead, because if you look at the financial services businesses the value of that portion alone is more than the market cap of Tube Investments?A: It is historical in terms of structure the Tube Investments were the original investors in our financial services business. We are very pleased that our financial services business has grown very significantly both in non-banking financial services (NBFC) and insurance.Simultaneously the engineering and the consumer side of Tube Investments has also grown. We will do what is best for all stakeholders and we will give it appropriate thought in terms of how we need to structure going forward.Q: So, no plan for any demerger soon coming up for Tube Investments?A: At this time as we speak none, but at the same time as I said we will do progressively as to what is best for all the stakeholders.Q: No plans for monetising any part of what you hold in Cholamandalam Investment Corporation or even Chola MS General Insurance going ahead?A: We have no plans to monetise any parts of Chola Investments. In recent times we sold 14 percent of the stake to our partners Mitsui Sumitomo in the insurance business. We have no plans to monetise beyond that at this point in time.