Kajaria Ceramics has planned to invest Rs.123 crore in a major capacity expansion programme. The project forms part of the company's long term objective of attaining capacity of 40 million sqm, by March 2010.

The company would be increasing the combined capacity of its two plants from 18 million sqm by another 8.4 million sqm. Kajaria's plants are located at Sikandarabad in Uttar Pradesh [9.7 million sqm] and Bhiwadi in Rajasthan [8.3 million sqm]. The expansion project will make Kajaria Ceramics India's largest manufacturer of ceramic (floor and wall) tiles.

The project will be financed by internal accruals of Rs.43 crore and debt of Rs.80 crore. Kajaria Ceramics has also planned to raise $30 million by way of GDRs or FCCBs.

According to Kajaria Ceramics, the Indian ceramic tiles market is currently 270 million sqm, valued at Rs.5,500 crore. India's share in world production is an estimated 4.1 per cent.