CASE STUDY · OPERATING LEASE
₹20 Cr of new machinery. No new bank debt.
How a leading steel and engineering manufacturer expanded high-precision production on a 60-month operating lease, with bank limits untouched and the balance sheet clean.
CAPEX FINANCED
₹20 Cr
TENURE
60 months
STRUCTURE
Operating lease
ASSETS COVERED
Precision machinery
THE CLIENT
A Tier-1 supplier to India's leading automakers.
The client is the Indian arm of a globally diversified engineering group, making value-added steel and engineering products for major automotive OEMs and industrial customers.
It runs state-of-the-art plants across the country, specialising in metal stamping, forging, aluminium casting, fasteners, steel tubes and fabrication.
Client name withheld for confidentiality.
CLIENT PROFILE
₹1,500 Cr+
Annual revenue
4,000+
Employees
20+
Manufacturing units
5+
Group companies
THE CHALLENGE
Growth was ready. The balance sheet wasn't.
The client planned to modernise and expand capacity with a ₹20 Cr investment in advanced machinery and core plant equipment. Every conventional way to fund it came with a cost.
Limited banking headroom
Existing working capital and bank limits were nearly fully utilised.
Leverage and credit risk
More bank debt would have weakened leverage and credit ratios.
Liquidity strain from equity
Promoter funds or fresh equity would have tightened internal liquidity.
HOW CAPEXO STRUCTURED IT
An operating lease, paced to production.
Instead of a term loan, Capexo owned the equipment and leased it to the client, so the expansion ran on monthly rentals rather than a lump sum.
01
Capexo financed the assets
₹20 Cr of high-precision manufacturing equipment, funded and owned by Capexo.
02
The client leased them
A 60-month operating lease on commercially viable terms, with no upfront purchase.
03
Rentals matched the ramp-up
Lease rentals were aligned with production growth and the plant's cash flows.
KEY BENEFITS
What the lease made possible.
Four gains the client saw from leasing the equipment instead of buying it.
No cash locked in CapEx
Skipping the upfront purchase kept liquidity free for operations and growth.
Stable financial ratios
Keeping the lease off traditional loan books protected leverage and credit health.
Predictable cash management
Fixed lease payments made budgeting and planning straightforward.
Sharper competitiveness
New equipment went live fast, adding capacity and supply reliability for OEM customers.
RESULTS
New capacity on the floor.
Balance sheet untouched.
The client executed ₹20 Cr of CapEx to acquire high-precision manufacturing equipment. The leasing model delivered maximum tax efficiency, a stronger balance sheet position, and more confidence from bankers and investors for future fundraising.
Clean balance sheet
Financial covenants intact
Working capital preserved
Maximum tax efficiency
Stronger case for future fundraising
Planning CapEx without adding bank debt?
Tell us what your plant needs. We'll show you how an operating lease could fund it.