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Thursday, June 01, 2006

Navayuga plans IPO in second half of fiscal year

Having remained closely held for the last two decades, Navayuga Engineering Company, NEC, the Hyderabad-based multi-disciplinary engineering and construction company, is now planning an IPO reports The Hindu Business Line.

The offer is aimed at raising around Rs 500 crore (Rs 5 billion) by diluting over 20% of equity to meet aggressive growth plans and is being planned for sometime in the second half of the current fiscal, according to the chairman, C. Visweswar Rao.

As a part of the equity dilution plans, the company proposes to go in for private placement of up to 10% of equity before going public.

It plans to take advantage of the recent government decision to allow infrastructure ventures for pre-IPO private placement of equity with FIIs.

The company, which recorded growth of over 140% in topline at around Rs 610 crore (Rs 6.10 billion) during the fiscal ended March 2006, is eyeing a turnover of Rs 2,000 crore (Rs 20 billion) by 2010 through a conservative growth plan.

According to Rao, the company has around Rs 4,500 crore (Rs 45 billion) of orders on hand and is currently conservative in accepting the orders consciously.

"We expect a growth of over 40% in the next couple of years and at least 30% for another three years from then. It requires over Rs 10,000 crore (Rs 100 billion) worth of orders to reach the level of Rs 2,000-crore turnover."

He added: "The company's key strengths are in construction of pile foundations, marine and harbour structures such as berths and jetties, industrial structures and bridges."

Navayuga has a sizeable team of well-qualified professionals, a majority of whom have been with it since inception. It has an in-house design cell manned by engineers with extensive experience in the design of special foundations, marine works, and industrial structures.

The company, whose current strength is over 500 engineers, has set a target of employing 1,000 engineers by 2010. As a part of this, the company has already started aggressively recruiting engineers, Rao said.

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