Optical Fiber Manufacturer Expands Capacity from 14 Mn to 33.90 Mn FKM; Total Investment Rs 580 Crore; Warrants Worth Rs 555 Crore

HFCL share price closed 1.94 per cent higher at Rs 70 on Wednesday, March 25, 2026. The company’s Board of Directors approved a series of key strategic decisions, with the establishment of a greenfield preform manufacturing facility emerging as the central highlight of the day’s announcements.

HFCL to Set Up Rs 580 Crore Preform Facility Through HFCL Technologies Private Limited

HFCL's Board has approved the establishment of a Preform Manufacturing Facility through its wholly owned subsidiary, HFCL Technologies Private Limited. The proposed facility will have a capacity of approximately 300 to 310 metric tonnes per annum at an estimated capital expenditure of approximately Rs 580 crore and is expected to be completed by July 2029. The facility will be financed through a combination of internal accruals, debt and fresh funds raised through the proposed preferential issue or a combination of these means.

This move comes at a time when demand for optical fiber cables has been growing sharply, tightening supply conditions for optical fiber globally. HFCL's own optical fiber manufacturing capacity has already been scaled up from 14 million fiber kilometres to 28 million fiber kilometres and is now being targeted to reach 33.90 million fiber kilometres, with further expansion under consideration. The Preform facility will act as the foundation that supports this entire capacity ramp-up.

The demand outlook driving this investment remains strong across multiple segments. Rapid expansion by global hyperscalers is generating significant demand for optical fiber cables in data centres and high-speed networks. Continued 5G rollout and future 6G readiness require dense fiber backhaul infrastructure. Sustained domestic demand is being driven by government programmes such as BharatNet, while rising requirements from Defence, Railways, smart cities and enterprise networks add further depth to the demand pipeline.

HFCL Also Raises Rs 555 Crore Through Preferential Issue of Warrants to Promoters

To support this and other capital-intensive growth plans, HFCL's Board simultaneously approved the issuance of up to 7,50,00,000 warrants convertible into equity shares at Rs 74 per share, aggregating to approximately Rs 555 crore, to two promoter entities, NextWave Communications Private Limited and Satellite Finance Private Limited, in equal proportions of up to 3,75,00,000 warrants each. The issue is subject to shareholder approval at an Extra-Ordinary General Meeting scheduled for April 24, 2026. Each warrant is exercisable within 18 months from the date of allotment, with 25 per cent of the exercise price payable upfront and the remaining 75 per cent at the time of conversion.

About HFCL 

HFCL Limited is a technology enterprise with operations spanning high-end telecom and defence equipment, optical fiber and optical fiber cables, and digital network creation for telecom operators, enterprises and defence forces. The company operates manufacturing facilities in Hyderabad, Goa, Chennai, Manesar and Hosur and has R&D centres in Gurugram, Bengaluru and Hyderabad.

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Disclaimer: The article is for informational purposes only and not investment advice.