Shares of RK Forgings shot up on Friday morning going up close to 3% to hit an intraday high of ₹758.55.

What Happened: Ramkrishna Forgings on Wednesday announced that its board approved the establishment of a new manufacturing facility in Mexico.

The Kolkata-based company has secured approval to commence manufacturing and supplies from its new location in Mexico. The company has entered a 10-year “Take or Pay” agreement worth $3.5 million (₹29 crore) per annum for machining components with a North American customer. The company is not obligated to make any investments in Plant & Machinery for manufacturing the products under this agreement.

See Also: How To Check Zenith Drugs IPO Allotment Status

Additionally, the board of directors has sanctioned an investment of up to ₹90 crores to set up a facility for manufacturing components in the PV/LV segment. The new facility is expected to have an installed production capacity of 11,000 metric tonnes per annum. “This investment is supported by a long-term
minimum $10 million (₹82.86 crore) per annum "Take or Pay" agreement with a North American customer,” the company added in a press release.

As per the railway company, the investments will open a sea of opportunities to entertain customers looking for local content in the manufacturing of Automotive components in North America.

Price Action: RK Forgings’ share price was up 2.08% to trade at ₹754.15 as the markets opened on Friday.

Read Next: Mukul Agrawal Picks Up Stake In This Small-Cap Railway Stock