Tyre manufacturer MRF Ltd. has signed a non-binding Memorandum of Understanding (MoU) with the Government of Tamil Nadu to establish a ₹5,300 crore greenfield manufacturing facility over the next 12 years. According to the latest regulatory filing dated March 4, 2026, the company announced this strategic expansion on Wednesday, March 4, marking a significant commitment to India's manufacturing sector. The MoU is facilitated through MRF's Nodal Agency "Guidance" to ensure smooth project implementation. As per Grounded Research, this represents a substantial commitment from India's largest tyre manufacturer, known for its diverse product range catering to all vehicle segments and extensive nationwide distribution network.
The proposed plant will be located at SIPCOT Industrial Park in Sivaganga district, as reported by the latest regulatory filing. The facility is designed to manufacture automotive tyres and allied products, expanding MRF's production capabilities in the southern Indian market. The company expects the facility to generate direct employment for around 1,000 people once fully operational, representing a significant boost to local employment opportunities. According to the filing, this expansion aims to increase overall production capacity for MRF, strengthen its operational footprint within Tamil Nadu, and create approximately 1,000 direct jobs in Sivaganga District. The SIPCOT Industrial Park is being developed as a major industrial hub, making it an ideal location for this large-scale manufacturing project.
The establishment of this manufacturing unit is subject to the state government sanctioning a customised incentive package, infrastructure support including land allocation, and statutory approvals under applicable laws by the Government of Tamil Nadu, as reported by the latest regulatory filing. This regulatory framework ensures proper planning and compliance before the project can proceed to the next implementation phase. As per the filing, the investment would be spread over a period of 12 years as the project progresses toward implementation. The memorandum is non-binding in nature and remains subject to several conditions, with the agreement representing an initial step toward establishing a new manufacturing project in Tamil Nadu, subject to approvals and support from the state government.
The investment announcement comes on the back of MRF's impressive Q3 performance, where the company posted consolidated net profit of ₹692 crores for the quarter ended December 31, 2025, compared to ₹315 crores in the year-ago period. As reported by CNBC TV18, consolidated total income increased by 15% to ₹8,175 crores for the quarter, while consolidated profit before tax stood at ₹917 crores after providing for an exceptional item of ₹77 crores due to new labour codes. The strong performance was driven by robust demand from both original equipment and replacement markets, aided by GST rate reductions and positive rural economy conditions. In the third quarter, both OE and replacement sales were robust due to increased demand following GST rate reductions and the rural economy picking up against the background of good and widespread monsoons.
Shares of MRF Ltd. were trading at ₹1,35,090 apiece, down 2.9% for the day as of 12:28 pm on Wednesday, according to CNBC TV18. Despite the positive investment announcement and strong quarterly results, the stock movement occurred due to mixed market sentiment toward the news. Looking ahead, MRF expects the demand buoyancy arising from reduction in GST rates to continue in the fourth quarter, with OEMs expected to increase production levels due to higher sales and reduced channel inventory. The company also anticipates that trade agreements being finalized by the government with various countries, including the EU and US, will open up future export opportunities for automotive components. The proposed investment is expected to contribute to industrial growth in the Sivaganga district while strengthening Tamil Nadu's position as one of India's major automotive and manufacturing centres.
