Dhoot Transmission IPO Expansion to Increase Wiring Harness Capacity by 23%

Dhoot Transmission Ltd, India's largest supplier of wiring harnesses for two- and three-wheelers, is preparing to expand its manufacturing footprint by approximately 23% through two new facilities that will be partially funded by its upcoming initial public offering. The Pune-based automotive component manufacturer will also establish additional production facilities beyond those financed through the IPO, reinforcing its long-term strategy to support growing customer demand across the automotive industry.

The company, which supplies major manufacturers including Bajaj Auto, TVS Motor Co, Honda Motorcycle & Scooter India and Royal Enfield, has allocated Rs 150 crore from its proposed Rs 1,400 crore fresh issue toward new wiring harness plants in Sector 11, Jhajjar, Haryana, and Shoolagiri near Hosur, Tamil Nadu. According to its updated draft red herring prospectus, Rs 109.3 crore has been earmarked for the Hosur project and Rs 40.7 crore for the Jhajjar facility, with deployment planned during fiscal years 2027 and 2028. The combined project cost is estimated at approximately Rs 225 crore, with the remaining investment funded through internal accruals.

Dhoot Transmission Capacity Expansion Plans

The two manufacturing plants are expected to add a combined annual wiring harness production capacity of 3.06 million units. The Jhajjar facility will contribute 1.44 million units annually, while the Hosur plant will add 1.62 million units. This expansion will raise the company's installed capacity from 13.11 million units to more than 16 million units, representing an increase of around 23%. The company calculates these capacities using a standardized wiring harness reference unit based on a generalized circuit count for consistent estimation.

Planned Wiring Harness Capacity Addition

Additional Manufacturing Investments Planned

Speaking during the IPO-related press and analyst briefing in Mumbai, Group Chief Financial Officer Nitin Kalani stated that the incremental capacity from the IPO-funded projects will account for a 23% increase. He added that the company is simultaneously investing in additional facilities that are not being financed through the IPO. These include a proposed manufacturing unit near Pithampur and a couple of battery plants as part of the current year's capital expenditure program.

Strategic Locations Support Key Customers

The Jhajjar Wiring Harness Plant is being developed primarily to support increasing demand from original equipment manufacturers operating in the National Capital Region, particularly Honda and Suzuki. Following Dhoot Transmission's acquisition of Multilink, Hero MotoCorp has also become a customer served through this regional manufacturing presence. The project is scheduled for phased completion, with final commissioning targeted for May 2027.

The Hosur Wiring Harness Plant is being constructed on 7.28 acres in Tamil Nadu and is intended to consolidate several smaller facilities into one integrated manufacturing unit. The expansion is expected to be completed by August 2027. Hosur is strategically located within Tamil Nadu's established two-wheeler manufacturing corridor, where leading manufacturers including TVS and several electric vehicle companies operate.

High Capacity Utilisation Drives Expansion

Dhoot Transmission currently operates 22 manufacturing plants across India, the United Kingdom, Slovakia and Thailand, while four additional facilities remain under construction. Several existing plants, including those at Manesar, Jhajjar, Hosur and Pithampur, recorded utilisation levels exceeding 89% during the nine months ended December 2025. According to the prospectus, sustained high utilisation at Hosur and Pithampur has become a limiting factor in accommodating additional customer demand.

Founder and Managing Director Rahul Dhoot explained that the company intentionally maintains average utilisation around 75% to manage seasonal demand spikes. He said, "Four and a half to five months a year, there is a seasonal demand wherein the business increases 30% every month. If we don't keep 75% capacity today, we will not be able to meet 100% of demand during the festive season."

Early Capacity Creation Supports Long-Term Growth

Rahul Dhoot also highlighted that the company develops manufacturing facilities before receiving confirmed customer orders, allowing it to respond quickly when demand materializes. He said this proactive strategy helped increase revenue from Rs 900 crore in fiscal 2019 to Rs 4,626 crore in fiscal 2026. According to him, customer forecasts require suppliers to anticipate future demand and establish production infrastructure well in advance to avoid supply constraints during growth periods.

Growing Vehicle Electronics Increase Harness Demand

The company's expansion aligns with broader investment trends among automotive component manufacturers as wiring harness content continues to rise across modern vehicles. Regulatory developments such as OBD-2 requirements and the industry's gradual transition toward electric powertrains have increased electrical system complexity. Electric two-wheeler penetration reached 6.4% in fiscal 2026 and is projected to exceed 20% to 25% by fiscal 2031. Dhoot Transmission held a 44.6% share of India's two- and three-wheeler wiring harness market by value in fiscal 2025 and more than 70% of the electric vehicle harness segment.

Rahul Dhoot said the company intends to continue expanding as long as customer demand remains strong. "Till the time we do not get a setback from any of the customers, we would like to continue this kind of an adventure," he said.

Frequently Asked Questions

Why is Dhoot Transmission expanding its manufacturing capacity?
Dhoot Transmission is increasing its manufacturing capacity to meet rising demand from major automotive OEMs and prepare for future growth in both conventional and electric vehicles. The company is investing in new facilities through IPO proceeds and internal funding while addressing high utilisation levels at existing plants. The expansion is expected to improve production flexibility, strengthen customer support across key manufacturing regions, and position the company for increasing wiring harness demand driven by vehicle electrification and evolving automotive technologies.

What new facilities are included in Dhoot Transmission's expansion plan?
The expansion includes new wiring harness manufacturing plants at Jhajjar in Haryana and Hosur in Tamil Nadu. Together, these facilities will add 3.06 million units of annual production capacity, increasing the company's installed capacity by approximately 23%. In addition to these IPO-funded projects, the company also plans another manufacturing facility near Pithampur and battery plants funded separately through internal investments, supporting its long-term manufacturing and growth strategy.