INOX Air plans Rs 3,000 crore investment by 2025 to meet rising demand

INOX Air Products, India's largest manufacturer of industrial and medical gases, plans to invest Rs 3,000 crore in ten sites nationwide by 2025 to meet the industry's growing demand across sectors, said its managing director Siddharth Jain.
He told ET that the company will allocate Rs 1,300 crore of its total investment to establish two air separation units (ASUs) at Tata Steel's Meramandali Plant in Odisha, which will have a daily production capacity of 1,800 tonnes of oxygen, as well as nitrogen and argon.

"It's a landmark investment for us as it represents our largest greenfield project at a single site to date. We have secured a 20-year contract with supply and offtake guarantees," said Jain. "Furthermore, we will utilise the same facility to produce liquid gases, catering to a range of smaller consumers in Orissa and the eastern region." He said the Rs 3000 crore investment will be funded through a mixture of internal accruals and debt.

According to Jain, the expansion plan is in line with the country's robust economic growth. "Our company has been achieving a growth rate twice that of GDP, surpassing the typical growth rate of the industrial gases sector, which is usually 1.5 times GDP. As India attracts more manufacturing companies, especially as the 'China plus one' model gains momentum among MNCs, the industrial gases sector will experience accelerated growth," he said.

As companies embark on a new capital expenditure cycle and new sectors such as solar and semiconductors emerge, the demand for industrial gases in India will align with that of developed markets, said INOX Air Products CEO. "We serve as a dependable gauge of India's manufacturing capacity growth as we cater to a diverse customer base across sectors such as metal manufacturing, cement, automotive, pharmaceuticals, healthcare and more. We are recording strong demand across sectors - traditional and new. As countries progress and achieve development, the demand for industrial gases sees exponential growth," said Jain.

The company, which went private in 1999 after the joint venture (JV) with Air Products fructified, said it currently does not have any intentions to approach the capital market or a private equity player to fund its current growth plan.

"When India's green hydrogen journey commences, that is when we might consider accessing the capital markets. It would only be necessary if we needed to raise more than Rs 10,000 crore. Our joint venture partner, Air Products, is the world's largest hydrogen manufacturer," said Jain.