SKM Egg Products commits ₹410 cr to quadruple egg-laying capacity
The company is borrowing ₹302 crore to scale output from 13.5 crore to 62 crore eggs annually while buying out its associate for ₹27.75 crore.
What's new
- Board approved a ₹410 cr capex plan to scale bird capacity from 500,000 to 2 million.
- Egg production capacity will jump from 13.5 crore to 62 crore eggs per year.
- Company is acquiring the remaining 74% stake in SKM Universal Marketing for ₹27.75 cr.
Why it matters
This is an aggressive bet for a micro-cap. The ₹410 crore investment represents roughly 40% of the company's market value and marks a clear shift toward large-scale vertical integration.
What we're watching
- The timeline for commissioning the new Environment Controlled sheds.
- Debt-to-equity impact following the ₹302 crore term loan drawdown.
- Integration milestones for SKM Universal Marketing's wind and branded egg units.
The full read
SKM Egg Products is betting big on scale. The company just approved a ₹410 crore capital expenditure program that aims to increase its laying bird count fourfold to 2 million, pushing annual production capacity from 13.5 crore eggs to 62 crore. To pay for the new Environment Controlled sheds, feed mill, and bio-gas facilities, the company is taking on a ₹302 crore term loan, with the remainder coming from internal accruals. Alongside this expansion, the board is consolidating control over its associate, SKM Universal Marketing. It is paying ₹27.75 crore in cash for the remaining 74% stake, giving the parent full ownership of the subsidiary's branded egg and wind energy operations. Given that the capex alone is equivalent to 40% of the company's current market value, the plan is a heavy lift. The next test is how efficiently SKM handles the transition from its current footprint to this significantly larger production base.