Bosch India to increase its capital expenditure

Bangalore: Auto parts maker Bosch has said that it will increase its capex by about Rs 250 crore this calendar year, but it was too early to make a forecast on the growth potential for the current year.

The Bosch India Managing Director, Mr V.K. Vishwanathan, told newspersons that the company was not in a position to make a forecast for the current year “as there was no visibility at this stage. A better picture should emerge by the second quarter of 2009.”

He said this year the company will focus more on manufacturing parts for the low-priced vehicles. A short upturn in February and March in the auto sector this year does not foretell a long-term trend.

Mr Vishwanathan said even though the Nano car launch was put off, it did not have any material impact on the company’s revenues. But he pointed out that to keep pace with the production of Nano during this year, Bosch may have to import some auto parts for the car.

The company will, however, increase its capital expenditure by about Rs 250 crore during this year. In 2008, its capex was Rs 425 crore compared with about Rs 294 crore in 2007. He said the inventory levels had increased 15 per cent as of December 31, 2008 compared with the same period during the previous year.

He said while there was a production cut between 12 per cent and 15 per cent in February this year, this month there are no plans for such reductions.
Mr Vishwanathan said Bosch has been able to mop up 2,20,000 shares at a cost of about Rs 67 crore from the shareholders after it launched an open offer in December last year. Before the buy back, Bosch’s stake was 69.6 per cent. It has set aside Rs 640 crore for the buy back of shares but it does not have not to spend the entire amount.

“The open offer was made so that we could return some money to our shareholders,” he said. The open offer closes in October this year. The maximum offer price has been fixed at Rs 4,500 a share.