Industrial Automation Companies Continue to Invest in Expanding facilities

Capacity expansion in India’s industrial automation industry is continuing as the demand for industrial infrastructure projects, process automation and digital control systems keeps growing. Companies in critical industries such as oil and gas companies, petrochemicals and energy are bolstering their manufacturing bases to handle larger, more complex projects. In line with this, Advanced Sys-Tek has submitted to the Securities and Exchange Board of India (SEBI) draft papers for an initial public offering (IPO) of ₹98 crore for its next phase of growth.

The proposed issue introduces a fresh equity component for the company, which will be primarily utilised to fund the construction of a new fabrication plant at its existing plant in Vadodara, investment in production equipment, investment in utility infrastructure and rooftop solar installations. Much of the proceeds has also been allocated for working capital, which will allow the company to fund long-cycle industrial projects, and enhance its business growth execution capability.

Advanced Sys-Tek specializes in the design of industrial automation, process control and fiscal metering systems for the Petroleum, oil storage and LPG industries. It has applications where precise measurement, process safety and operational reliability are paramount, and manufacturing capacity is of key importance in managing more complex customer needs.

Industry context

India’s Industrial Automation market is now at a stage of the investment in new technology, but also in the growth of its facilities and capability footprint. Rapid expansion of refineries, petrochemical complexes, fuel storage terminals, city gas distribution networks and industrial process plants is creating constant demand for automation equipment, control systems, instrumentation and metering solutions and hence a great potential for Industrial automation companies involved in partnering with these companies .

Automation firms are expanding their fabrication plants, boosting manufacturing capacity, and consolidating supply chains to deliver turnkey solutions at a later stage and faster time-to-market to take advantage of these opportunities. Modern production facilities also allow companies to build their products with higher quality, customization and to keep the trend of more modern production practices going, such as digital manufacturing.

This is the same trend the industry is seeing, as Advanced Sys-Tek plans to expand. The IPO is a financial achievement for the company, but it is the intention to invest in manufacturing capacity that is the key element. Moving forward, the automation suppliers who have the ability to produce more and execute better are likely to have a better chance of serving India’s next phase of industrial growth as the process industries modernize and investments in infrastructure continue to grow.