World's largest helmet producer by volume is leveraging robust cash flow to add 3 million units of capacity.
28 Oct 2025 | 1634 Views | By Shahkar Abidi
Studds Accessories Limited (SAL), which claims to be the world’s largest producer of two-wheeler helmets by volume, has planned a major capacity expansion aimed at capitalizing on strong domestic demand and rising international export opportunities. The company is constructing its fifth manufacturing facility, an important move that will boost its ...
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Studds Accessories Limited (SAL), which claims to be the world’s largest producer of two-wheeler helmets by volume, has planned a major capacity expansion aimed at capitalizing on strong domestic demand and rising international export opportunities. The company is constructing its fifth manufacturing facility, an important move that will boost its production capability by a third and enhance its standing in the $2 billion global power sports helmet industry.
Sidhartha Khurana, MD, Studds Accessories Ltd, during a pre-IPO interaction with media and analysts stated that the ambitious expansion centers on Manufacturing Facility V, which is currently under construction. This new plant is designed to add approximately 3 million units to Studds’ existing production capacity of 9 million units, majorly increasing its overall output potential.
The commissioning of the new facility is scheduled to be completed and operational in Fiscal 2026. Management has planned the rollout in two distinct phases: the first phase, which will account for 1.5 million units of the additional capacity, is expected to begin production in the final quarter of Fiscal 2026. The subsequent 1.5 million units will come online roughly one to one-and-a-half years later.
The new facility is strategically located near the company's existing operations, ensuring greater manufacturing efficiency and integration. While Studds is recognized for its flagship and premium helmet lines, the expansion will also bolster production of bicycle helmets and two-wheeler accessories such as luggage, a segment the company aims to grow. "Obviously the long term strategy has to be looking around even a bigger addressable market" noted Khurana.
A Manufacturing Backbone Built on Vertical Integration
Studds, which traces its history back five decades to 1972, boasts of consistently prioritized vertical integration and capital efficiency. The company’s growth strategy focuses on strengthening production capacity without incurring external debt.
The capital required for the Facility V expansion is being funded internally, as the company is generating sufficient cash flows and currently operates with no debt on its balance sheet. "There is no debt in the company and there is no private equity in the company," Khurana added.
This self-funded expansion strategy stands out, particularly since the company’s recent Initial Public Offering (IPO) was structured as a pure Offer for Sale (OFS), meaning the proceeds went to selling shareholders rather than the company itself. The company is looking to raise about Rs 455 crore from the primary markets. The initial public offering, scheduled to commence on October 30, 2025, and conclude on November 3, 2025. The anchor investor bidding window will open and close on October 29, 2025.
The company leadership did not specify the capex amount that will be required for the capacity expansion and other expenditures.
The current manufacturing backbone consists of four facilities located in close proximity in Faridabad, India. The combined annualized manufacturing capacity across these four facilities for two-wheeler helmets and motorcycle luggage stands at 9.04 million units. In Fiscal Year 2025 (FY25), the capacity utilization reached 86.6% for these product lines, confirming the need for the new facility.
Khurana highlighted that the facilities employ advanced processes and are extensively vertically integrated. This integration covers nearly every stage of production, from initial design and in-house mold making (injection molding) to the manufacturing of essential internal components. For instance, Studds manufactures its own EPS (Expanded Polystyrene), the key shock-absorbing material, often referred to as Thermocol in layman's terms and creates its own graphics (water decals).
Despite the focus on efficiency, management notes that the few functions in the industry remain fundamentally labour intensive. For example While departments like painting and injection molding are increasingly automated, three key areas such as stitching, graphic application, and assembly must remain highly manual. The company continues to invest in robotic machinery and smart manufacturing technologies (IoT connected machines) to improve operational excellence elsewhere in the value chain, they added.
Context in the Accelerating Automotive Market
Studds' aggressive capacity expansion is rooted in favorable trends within the global and Indian two-wheeler markets. India is not only home to the largest segment of the Indian automobile industry but is also seeing rising safety awareness and increasingly strict government regulations. Recent regulatory shifts, such as draft regulation suggesting supply of two helmets per motorized two-wheeler purchase (instead of one), are expected to significantly boost demand within the country.
Furthermore, the company is benefiting from the premiumization trend, where riders are willing to spend more on high-end lifestyle products. Studds caters to this through its premium brand, SMK, which operates at higher margin levels than the mass-market Studds brand.
Globally, India is emerging as a critical manufacturing base. While the global two-wheeler helmet market is expected to grow at a Compound Annual Growth Rate (CAGR) of about 5-6% through 2029, Indian exports are surging at a 21% CAGR. This momentum emphasizes the company's efforts to become a dominant global player, moving beyond its domestic market share of 25.5%.