Inox Air to invest Rs 2,000 cr to set up 8 medical oxygen plants across India

Inox Air Products, the industrial and medical gases business division of the diversified Inox Group, is investing Rs 2,000 crore to augment capacity by 50 per cent, with eight new air separation units across the country over the next 36 months.

This is the largest greenfield investment coming to the industrial gases sector in the country, the company said.

It also said the expansion of adding to the present 44 plants will ramp up its liquid medical oxygen capacity by 50 per cent and overall capacity to 4,800 tonne per day from 3,330 TPD now.

The proposed gas plants, which will include both industrial and medical gases, will come up in Andhra, Bengal, Gujarat, Madhya Pradesh, Maharashtra, Tamil Nadu and Uttar Pradesh. And, the first plant is expected to be up and running in Tamil Nadu or Gujarat over the next 12 months, said Siddharth Jain, a director at the company.

Began as Industrial Oxygen Company in Pune in 1963, in 1999, Air Products & Chemicals Inc of the US acquired 50 per cent stake in the company and renamed it as Inox Air Products. It is the country's largest industrial gasses manufacturer with an installed capacity of 3,330 TPD which will go up to 4,800 TPD by 2024 on completion of these new units.

Jain said that in the medical gases (oxygen), Inox is the leader with around 60 per cent market share. In industrial gases, it claims around 40 per cent market share, he said while refusing to share a revenue target with the expansion.

Whether the company has an existing land bank in these states, Jain said there won't be any issue in buying land in these states and the same will be completed within the next month and the work will begin soon after. The first plant will most probably come up in Tamil Nadu or Gujarat next fiscal and the remaining seven getting commissioned through FY24, he added.

The proposed Rs 2,000-crore investment is the largest ever capital expenditure (capex) in this segment and will be completed through 2023-24. We hope to fund this with an equal mix of debt and equity, Jain told PTI on Friday.

He also said the proposed plant will be the maiden medical and industrial oxygen plant in Madhya Pradesh, and all the plants are greenfield (new). "In Gujarat, we will have two new plants coming up under this capex cycle," he added.

On the impact of the pandemic on his business, Jain said that during the initial months of the lockdown, the medical division contributed almost 80 per cent of the business. But, it has not reverted to pre-lockdown days of 80 per cent income from industrial gases and the rest from medical gases, he added.

"We closed last year with a topline (revenue) of Rs 1,800 crore and hope to close flat this fiscal as the first quarter was washed out due to the lockdown," Jain said.

The Rs 1,800-crore Inox Air Products, an equal joint venture between Inox Group and the US-based Air Products Inc, is the largest manufacturer of industrial and medical gases in the country with around 40 per cent market share.

The new plants will manufacture liquid oxygen, liquid nitrogen and liquid argon, cumulatively producing 4,800 tonne a day by 2023-24.

The expanded capacity will enable us to serve the core sectors and will generate 1,000 direct and indirect jobs.

Inox currently manufactures 3,300 TPD of liquid gases across 44 locations. During the pandemic, Inox catered to more than 60 per cent of the total medical oxygen demand supplying to over 800 hospitals nationwide.