HFCL Approves ₹820 Crore Additional Capex; Total Optical Fiber Expansion Plan Reaches ₹1,800 Crore
HFCL Limited has approved an additional investment of approximately ₹820 crore to expand its manufacturing capacities for Optical Fiber (OF), Optical Fiber Cable (OFC) and Preform.
The decision was taken at the company’s Board meeting held on September 14, 2026, and comes amid a strong order book, a growing business pipeline and increasing global demand for optical communication infrastructure.
With the latest investment, HFCL’s total planned capital expenditure for these capacity expansion initiatives will rise to approximately ₹1,800 crore, including around ₹980 crore of capex approved earlier.
HFCL Plans Major Capacity Expansion
Under the latest expansion plan, HFCL will add:
- 4.60 million fiber kilometres per annum of Optical Fiber capacity
- 5.64 million fiber kilometres per annum of Optical Fiber Cable capacity
- 300 MT per annum of Preform manufacturing capacity
After completion of the ongoing and proposed expansions, the company’s manufacturing capacity is expected to reach:
- Optical Fiber: 43.10 million fiber kilometres per annum
- Optical Fiber Cable: 62.00 million fiber kilometres per annum
- Preform: 600 MT per annum
The Optical Fiber and Optical Fiber Cable expansion projects are expected to be completed by July 2028, while the new Preform manufacturing facility is expected to be established by October 2028.
₹19,000 Crore Order Book Provides Visibility
A key factor behind the expansion is HFCL’s strong order book.
According to the company, its combined order book for Optical Fiber Cable and connectivity solutions stood at approximately ₹19,000 crore as of September 14, 2026.
HFCL said it also has a robust pipeline of additional business opportunities expected to materialise over the near to medium term.
For investors, the combination of a large order book and capacity expansion is important because the additional manufacturing capacity is intended to support existing customer commitments while allowing the company to pursue new domestic and international opportunities.
₹820 Crore Investment Across OF, OFC and Preform
The company has allocated the additional ₹820 crore investment across its optical communications manufacturing chain.
Approximately:
- ₹670 crore is earmarked for the Preform manufacturing facility.
- ₹150 crore is earmarked for Optical Fiber and Optical Fiber Cable capacity expansion.
The additional investment is over and above the approximately ₹980 crore of capital expenditure already approved by the Board.
Therefore, the total planned capex for these optical fiber-related capacity expansion initiatives will be approximately ₹1,800 crore.
Why Preform Manufacturing Is Important
One of the significant elements of the announcement is HFCL’s planned Preform manufacturing facility.
Preform is a critical input used in the manufacturing of Optical Fiber. By establishing its own manufacturing capacity, HFCL intends to strengthen its backward integration and reduce dependence on external suppliers.
The company expects the facility to help improve:
- Supply chain resilience
- Availability of critical raw materials
- Cost efficiency
- Operational control
- Manufacturing integration
- Potential margin efficiency
The Preform facility will be implemented through HFCL’s wholly owned subsidiary, HFCL Technologies Private Limited.
AI and Data Centres Could Drive Optical Fiber Demand
HFCL believes the long-term demand outlook for optical communication infrastructure remains favourable.
The company highlighted several demand drivers, including:
- AI-enabled digital infrastructure
- Hyperscale data centres
- Cloud computing
- High-performance computing
- Telecom network expansion
- Fibre-to-the-home (FTTH)
- Enterprise fibre connectivity
- Rural connectivity programmes
- Telecom network modernisation
The expansion of AI and hyperscale data centres is particularly relevant because AI workloads require the movement of very large volumes of data within and between data centres.
This is increasing the requirement for high-capacity, reliable and low-latency optical connectivity, potentially creating additional opportunities for optical fiber and optical cable manufacturers.
HFCL Targets Domestic and International Markets
The company said the additional capacity will help it cater to increasing demand in both domestic and international markets.
The expanded manufacturing base is expected to provide HFCL with greater flexibility to execute existing customer commitments and pursue new business opportunities.
The company also expects the investment to strengthen its export competitiveness as global digital infrastructure continues to expand.
How HFCL’s Manufacturing Capacity Will Change
The expansion will significantly increase HFCL’s optical manufacturing footprint.
Optical Fiber
Existing capacity was stated at 28.0 million fiber kilometres per annum. Ongoing expansion is expected to take this to 38.50 million fiber kilometres, while the latest proposal adds another 4.60 million fiber kilometres, taking the eventual capacity to 43.10 million fiber kilometres per annum.
Optical Fiber Cable
Existing capacity was 39.0 million fiber kilometres per annum. Ongoing expansion is expected to take capacity to 56.36 million fiber kilometres, followed by the proposed addition of 5.64 million fiber kilometres, taking the eventual capacity to 62.00 million fiber kilometres per annum.
Preform
HFCL is establishing a Preform manufacturing facility with an initial capacity of approximately 300 MT per annum, with the latest expansion taking the planned total capacity to approximately 600 MT per annum.
Funding Plan
HFCL said the investment will be funded through an appropriate combination of:
- Internal accruals
- Borrowings from financial institutions and banks
- Proceeds from the preferential issue of warrants already issued to the Promoter and Promoter Group entity
- Other suitable financing arrangements
The exact mix may vary depending on the company’s funding requirements.
Management Commentary
HFCL Managing Director Mahendra Nahata said the investment is an important step towards building a larger and fully integrated optical communications manufacturing platform.
He highlighted the growing adoption of AI-enabled digital infrastructure, hyperscale data centres, cloud computing and advanced telecom networks as long-term opportunities for optical communication products.
The company said the expansion is intended to strengthen its ability to meet customer requirements, improve supply chain resilience and enhance operational efficiency.
What This Means for HFCL Investors
The announcement is significant from an investor perspective for several reasons.
First, the order book provides demand visibility. HFCL has reported an approximately ₹19,000 crore combined order book for OFC and connectivity solutions.
Second, the company is committing substantial capital to increase manufacturing capacity. The latest ₹820 crore investment takes the total planned capex for these capacity expansion initiatives to approximately ₹1,800 crore.
Third, HFCL is moving towards greater vertical integration. The planned Preform facility could reduce dependence on external suppliers and provide greater control over a critical raw material.
Fourth, the expansion is aimed at structural growth areas. AI infrastructure, hyperscale data centres, cloud computing, FTTH and telecom network modernisation could support long-term demand for optical connectivity.
However, investors should also monitor the execution of the ₹1,800 crore capex programme, funding requirements, project timelines, capacity utilisation, order conversion and profitability/margin performance as the expansion progresses.
Bottom Line
HFCL’s latest announcement represents a major capacity expansion in its optical communications business.
The company is adding ₹820 crore of fresh investment, taking its total planned capex for these optical fiber, cable and preform expansion projects to approximately ₹1,800 crore.
Once completed, HFCL expects to have 43.10 million fiber kilometres of Optical Fiber capacity, 62.00 million fiber kilometres of Optical Fiber Cable capacity and 600 MT of annual Preform capacity.
With an approximately ₹19,000 crore OFC and connectivity order book, the company is positioning the expanded manufacturing platform to capture expected demand from AI infrastructure, data centres, cloud computing, telecom expansion and fibreisation in India and international markets.
For investors, the key story to track from here will be whether HFCL can convert its order visibility and new capacity into sustainable revenue growth, higher capacity utilisation and improved profitability.
Company Disclosure
This article is based on HFCL Limited’s stock-exchange disclosure dated September 14, 2026 regarding the outcome of its Board meeting and the accompanying press release.
Disclaimer: This article is for informational and educational purposes only and should not be considered investment advice or a recommendation to buy or sell HFCL shares. Investors should conduct their own research and consult a SEBI-registered investment adviser before making investment decisions.