Indian IPO

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Saturday, April 28, 2007

GSS America Infotech files DRHP with SEBI

GSS America Infotech, a leading Global IT Services company focused on providing scalable and cost-effective solutions using global delivery model, has filed its draft red herring prospectus (DRHP) with Securities & Exchange Board of India (SEBI) to enter the capital market with an initial public offering, IPO of equity shares.

The company proposes to offer 34,97,495 equity shares of Rs 10 each. The issue comprises of a net issue of 33,40,000 equity shares of Rs 10 each to the public and up to 1,57,495 equity shares of Rs 10 each will be reserved for subscription by eligible employees. The issue will constitute 26.30% of the post-issue capital of the company. The issue is being made through a 100% book building process.

GSS America has been making exponential progress over the last four years. The company has achieved a turnover of Rs 116 crore for the first nine months ending December 31, 2006 as compared to Rs 63 crore achieved for the full financial year 2005-2006. The company has been growing at over 160% compared to previous year.

GSS America Infotech is planning to invest in a 1,000-seater offshore facility with a capital outlay of about Rs 61 crore in Hyderabad. To finance its expansion plans - both organic and inorganic, the company is planning to raise about Rs 120 crore from the capital market.

GSS America is a niche player in the area of Enterprise Application Integration and Infrastructure Management Services.

GSS America has recently placed its equity on a pre-IPO basis to leading Financial and Venture Capital Institutions like IL&FS and other private investors to the extent of Rs 35 crore.

Binani Cement fixes IPO price band at 75-85; opens on May 7

Binani Cement, a subsidiary of Binani Industries (BIL), promoted by Braj Binani is entering the capital markets with a public offer of 20,500,000 equity shares of Rs 10 each for cash, through an offer for sale by JP Morgan Special Situations.

The offer shall be through the 100% book – building process. The price band for the offer has been fixed between Rs 75 and Rs 85 per equity share. The public offer opens on May 7, 2007, and closes for subscription on May 10, 2007. The offer shall constitute 10.09% of the post-offer paid-up capital of the company.

The equity shares are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange.

At least 60% of the offer will be allocated on a proportionate basis to qualified institutional buyers (QIBs). Also, 5% of the QIB portion shall be available for allocation on a proportionate basis to mutual funds only, and the remainder of the QIB portion shall be available for allocation on a proportionate basis to all QIB Bidders, including mutual funds, subject to valid bids being received at or above the offer price.

Upto 30% of the offer shall be available for allocation on a proportionate basis to the retail individual bidders and upto 10% of the offer shall be available for allocation on a proportionate basis to non-institutional bidders, subject to valid bids being received at or above the offer price.

It is focused on key markets in northern India with a significant presence in Rajasthan, Haryana and Delhi besides Gujarat in Western India. It has facilities for manufacture of 2.25 MTPA of cement which has now been enhanced to 5.3 MTPA at Sirohi, Rajasthan. It manufactures OPC and PPC, with an OPC: PPC product mix of about 71:29 in fiscal 2005, 63:37 during fiscal 2006 and 51:49 for fiscal 2007. The Sirohi facility has been set up with the support of the Denmark-based F. L. Smidth.

The company has increased the clinker capacity at its plant by 2.3 MTPA, with commercial production of the cement capacity expected to commence from May 2007. It is adding another 44.6 MW (2 X 22.3 MW) captive power plant to the existing 25 MW coal / lignite based plant with one unit of 22.3 MW expected to be commissioned by June 2007 and another by October 2007. The total cost of the expansion project is estimated at Rs. 5,750 million (including the second unit of the captive power plant to be installed by October 2007 at a cost of Rs. 600 million).

The company posted a total income of Rs 5,665 million and a profit before tax of Rs 1097 million for the nine months ended December 31, 2006. It posted a total income of Rs 5,840 million and a profit before tax of Rs 581 million for the year ended March 31, 2006.

The book running lead manager to the issue is ICICI Securities Primary Dealership and the co-book running lead manager is J P Morgan India Private Limited.

Friday, April 27, 2007

Looking to raise Rs 160-200 cr via IPO: Motilal Oswal

Motilal Oswal Financial Services is coming out with a public issue of 29.8 lakh shares. Motilal Oswal, CMD of Motilal Oswal Financial Services says that this move is to expand their existing business - more branches, better technologies, more businesses and more acquisitions.

Excerpts from CNBC-TV18's exclusive interview with Motilal Oswal:

Q: Could you put it out for us, how much are you looking to raise and what are you going to use the money for?

A: We have filed our DRHP with Sebi and we basically are issuing 10.5% of our equity in public offering, listing will be depending on all the other formalities and timing about the market.

Q: Roughly how much are you looking to raise though?

A: Roughly it will be anywhere between Rs 160-200 crore.

Q: Could you lay out what exactly are you going to use this money for?

A: This is basically for expanding to our existing business, which is more branches, better technologies, more businesses and might be few acquisitions as and when it will happen.

Q: Could you walk us through the kind of financials each one of your subsidies are clocking at this point in time and the kind of revenue mix you are targeting going forward in FY08 and forward years?

A: I cannot talk about the futuristic numbers because we have already filed our DRHP with Sebi.

Q: If you can shed more light on the current revenue mix?

A: In the first nine months, we have done something around 250 crore worth of revenues and 50 crore PAT.

They are different businesses - like we have got wealth management business, we have got investment banking business, we have got institutional business, we have got private equity fund management as a business. So I think different revenue stems from all these businesses.

Q: By when are you hoping to price this issue?

A: I think it will happen anywhere in the month of July.

Q: On the ballpark that you have laid out, the priceband could be anywhere between 500 and 700 in your initial calculations with your merchant bankers?

A: I would say that last year we have put our equity with the private investors where the firm was valued at around USD 300 million. So let us see how much valuation the market can give us.

Q: Can you highlight the kind of risk that entails in all the businesses that you operate at this point of time because there is a high core relation with the movement in the stock markets, how do you look to mitigate or hedge that risk?

A: Yes, you are right, we are in the business, which is too much cyclical. But the strategy is basically to de-risk by having more or more products and different businesses. In last couple of years, we have added investment banking into our business and we also have added private equity fund management in our business.

So to that extent, I think we are de-risked from the predominant brokerage business, which we were in, three years before.

Q: What kind of margin are you seeing in all kind of subsidiaries at this point in time including the investment banking subsidiary, which has come by recently?

A: Operating profit depends upon different businesses like investment banking and institutional business, which are more people driven; there margins will be higher versus wealth management business, it is a bit lower because of huge cost of operations.

IPO WATCH
Mot Oswal Fin Svcs
-Issue of 29.8 lakh shares (FV Rs 5)
-Issue constitutes 10.5% of post-issue capital
-Promoter holding to go down to 69% post issue

Thursday, April 26, 2007

Sponsors to sell 50% of UTI AMC

The four state-owned sponsors of UTI Asset Management Company (AMC) will offer 50% of their holdings for sale, paving the way for a public listing of one of the largest fund houses in the country.

The planned listing will mark the first by a local fund house which now manages assets worth Rs 36,000 crore. Globally, investment management firms such as Franklin are listed on the New York Stock Exchange.

State Bank of India, Life Insurance Corporation of India, Punjab National Bank and Bank of Baroda are the four sponsors of the AMC which was formed in 2003 after UTI, the country’s first mutual fund, was split into two. All the four control 25% each of the Rs 10-crore paid-up capital of the asset management firm.

The net asset value (NAV)-based schemes were transferred to UTI AMC then as part of a restructuring of the mutual fund in the wake of a crisis. The four sponsors paid the government close Rs 1200 crore after a valuation exercise in 2005.

The listing will provide them with an opportunity to realise good value by selling just 50% of their original holdings.
The board of directors of the AMC on Tuesday approved the proposal for an offer for sale by the sponsors and the plans for listing after securing all approvals, according to a bank official privy to the decision.

The government has also been sounded out on the proposal, he said. UTI AMC also plans to issue ESOPs to its staffers. A plan to list UTI as a holding company was also mooted in the past.

Koutons to tap capital market, files DRHP

The retail garment brand Koutons has filed its draft red herring prospectus, DRHP with SEBI and intends to enter the capital market with an IPO.

As on February 28, 2007, the company had 26 manufacturing and warehouse facilities in and around Gurgaon, and a network of 674 retail outlets across India.

Passport India Investments (Mauritius) has picked up 6,00,000 equity shares in Koutons Retail India for an investment amount of Rs 210 million. Passport has been allotted the equity shares at a fixed price of Rs 350 per equity share. With this infusion Koutons Retail India has raised an aggregate amount of Rs 1,216 million as private equity since June 2006. The earlier investors were UTI Venture Funds Management Company Private Limited and Argonaut Ventures.

DPS Kohli, chairman of Koutons said, "We believe that we are well positioned to capture considerable growth opportunities in Indian apparel manufacturing and retail sector. The key strength of our company lies in wide network of exclusive brand outlets, with low-cost sourcing capabilities, unique brand positioning, design and merchandising expertise, with a pulse on fashion, experienced and efficient management, wide apparel range and IT Infrastructure."

Koutons Retail India is an Indian company branding and marketing its products as "Koutons" and "Charlie Outlaw". The Koutons brand is positioned in the middle to high fashion segment, offering a complete range of a man's wardrobe (in the age group of 22 to 45 years) ranging from semi formal to casual and party wear. The old premier brand "Charlie" has recently been reinvented and re-launched as "Charlie Outlaw". The "Charlie Outlaw" brand is a casual brand targeted at fashion conscious youngsters in the age group of 14 to 25 years and is positioned as a fashionable and contemporary, value for money brand.

MIC Electronics sets IPO price band at Rs 129-150

MIC Electronics, the Hyderabad-based ISO 9000:2000 certified company, engaged in the design and manufacture of True Colour LED video display systems, is entering the capital market with an initial public offer (IPO) of 5,100,000 equity shares of Rs 10 for cash at a price to be decided through the 100% book-building process for listing on both Bombay Stock Exchange and National Stock Exchange.

The price band for the offer has been fixed between Rs 129 and Rs 150 per equity share for IPO opening on April 30, 2007, and closing on May 8, 2007. The public offer constitutes 25.34% of the company’s fully diluted post issue paid up equity capital.

Upto 50% of the issue will be allocated on a proportionate basis to the qualified institutional buyers, of which 5% of the issue will be available for allocation to mutual funds. Further, 15% of the issue will be available for non-institutional bidders and 35% of the issue will be available for allocation on a proportionate basis to the retail individual bidders.

M V Ramana Rao, MD, MIC Electronics, said, “The objects of the issue includes setting up additional facilities for manufacturing LED (Light Emitting Diodes) video modules and acquisition of Infostep Inc., in USA.” He added, “MIC has a presence in the LED display market internationally, with a customer base including the advertising agencies, LED rental companies, telecom equipment spenders BSNL and MTNL. MIC is now further strengthening its footprint internationally.” The Company has recently secured an order of Rs 1049 million from BSNL.

MIC Electronics has three divisions — Media, Info-Tech, Communications and Electronics. It is engaged in the design, development and production of True Colour LED video Display Systems, telecom software solutions and communication equipment such as Digital Loop Carrier on optical fibre including voice, video/data applications, and Hand Held Computers. MIC is the only Company in India to have the “Design-to-Manufacture” capability for the manufacture of LED Video Display Systems.

The unconsolidated total income, of the company for the 6 months ended December 31, 2006, was Rs 654.56 million and net profit after tax was Rs 108.91 million. During the year ended June 30, 2006, the total income posted was Rs 1,044.12 million while the net profit after tax was Rs 154.76 million. MIC has a confirmed order book of worth Rs 1678.55 million as on December 31, 2006.

The sole book running lead manager to the issue is Edelweiss Capital.

Tuesday, April 24, 2007

Uma Precision files for IPO with SEBI

Uma Precision (UMA), an ISO-TS-16949-2002 certified company, has filed its draft red herring prospectus (DRHP) with SEBI for entering the capital market with its initial public offering (IPO) of 40,00,000 equity shares of Rs 10 each for cash at a premium, including an employee reservation of 1,00,000 equity shares.

The issue will be conducted through 100% book building process and the net issue to the public would constitute 27.12% of the fully diluted post-issue paid-up capital of the company.

The objects of the issue are to part-finance the new upcoming projects of, Bright Bar Manufacturing, Cold Forging, CNC Machines, Delta Industrial Surface Coating Plant and New Manufacturing plant at Pant Nagar, Uttaranchal. The cost of the project would be approximately Rs 9136 lakh.

Uma Precision is a leading manufacturer and exporter of precision assemblies, systems and machined parts for auto and electrical industry. UMA manufactures more than 1000 different components for auto and electrical industries. The object of the company is to manufacture precision assemblies, systems, automotive and electrical components. UMA supplies auto components to major OEMs in India and also exports to USA, Germany and UAE.

Uma has two subsidiaries, Gera Auto Industries Private Limited (GERA) and Kontak Comfort Private Limited (KCPL). GERA is into same line of business as that of Uma while KCPL is into the business of Rubberized Coir Foam Mattresses and has six retail outlets.

Upto 50% of the net issue to the public shall be available for allocation on a proportionate basis to qualified institutional buyers. Atleast 15% of the net offer to the public shall be available for allocation on a proportionate basis to non - institutional bidders and atleast 35% of the net offer to the public shall be available for allocation on a proportionate basis to retail bidders.

The book running lead manager to the issue is Karvy Investor Services. The shares will be listed at the Bombay Stock Exchange and National Stock Exchange.

Wednesday, April 18, 2007

Simplex Projects plans IPO

Simplex Projects, an ISO 9001-2000 certified construction company, engaged in integrated engineering, procurement and construction services including specialised pile driving, is coming out with an IPO and has already filed the draft red herring prospectus with SEBI for issue of 30 lakh equity shares of face value of Rs 10.

UTI Securities has been appointed as the book-running lead manager for the issue.

B K Mundhra, chairman and managing director of Simplex, told that the basic objective was to augment long- term working capital requirements, besides acquisition of plant and machinery. He said funds would be needed for purchase of design and technology for semi- and fully-automated multi-level car parking systems and purchase of prototypes, an area in which the company is now developing huge expertise.

He said the company is already handling new construction projects in the North East (hospitals, market complexes and sewerage projects) especially in Assam, Manipur and Sikkim.

Retail parking space

Pradeep K Mishra, senior V-P (Finance & Accounts), said the company has planned to enter the retail parking space in a big way and has already signed a joint venture with a Korean company for the purpose. He said Simpark Infrastructure, the wholly owned subsidiary of the company for parking systems, intends to deploy some Rs 1 crore for marketing and promotion of semi-automated parking systems.

The semi-automatic system, technically labelled as Empty Square System or Puzzle Parking Technology, according to the company official, would provide independent parking spaces for cars in private buildings.

The system is for a maximum of 50 cars in a single module, and can be laid out in a maximum of 5 levels. He said it was adaptable to individual small project requirements.

According to the prospectus, Simplex proposes to invest Rs 6 crore of the net proceeds of the issue in Simpark Infrastructure by way of subscription to the equity capital of the subsidiary, reports The Hindu Business Line.

BEML files DRHP with SEBI for follow-on public offer

BEML, multi-locational and multi-product manufacturer of mining and construction equipments, railway & metro products and defence products, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to enter the capital markets with its follow-on public offer of equity shares.

The company proposes to offer 49,00,000 equity shares of Rs 10 each for cash at a premium to be decided through a 100% book building process. The issue includes a reservation for eligible employees of 4,90,000 equity shares and a net issue to the public of 44,10,000 equity shares.

The issue would constitute 11.77% of the fully diluted post-issue paid-up equity capital of the company. After the issue, the government holding is expected to be approximately 54%, and the company will continue as a "Government Company".

The book running lead manager to the issue is ICICI Securities.

The issue proceeds will fund the expansion of the Metro Coach manufacturing facility at Bangalore, and capital expenditure including upgradation of current facilities. The company also intends to use part of the proceeds to set up a 5MW Wind Mill for captive consumption and contribution towards setting up of an R&D Centre of Excellence for Metro Coaches. The company will also earmark some part of the proceeds towards a voluntary retirement scheme for employees.

Bharat Earth Movers is a Mini-Ratna (Category 1) company under the Ministry of Defence and ranked. BEML primarily deals in three product segments comprising mining and construction equipments, defence products and railway & metro products through which it caters to vital applications in diverse sectors of the economy such as mining, steel, cement, power, irrigation, construction, road building, defence, railway and Metro transit system.

Recently, it expanded its product range to cover high quality hydraulics, heavy-duty diesel engines, welding robots and heavy fabrication jobs. In the beginning of fiscal 2007, it decided to foray into two more new business areas: a) technology, providing e-engineering solutions globally; and b) trading, for marketing non-core components, spares, aggregates and commodities for domestic and international markets. It has been at the forefront of delivering robust, high-quality products to its customers resulting in low cost of ownership. To this extent, it incorporates state-of-the-art technology in all the products through market-driven R&D, and collaborates with reputed international companies for imbibing the latest technology.

The existing equity shares of the company are listed on the Bombay Stock Exchange, National Stock Exchange and the Bangalore Stock Exchange, as per press release.

PowerGrid files draft prospectus for IPO

Power Grid Corporation of India (PGCIL) filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its initial public offer and partial divestment of Government equity in the company.

PGCIL would issue 10% fresh equity and the Government would disinvest 5% stake in the company. Currently, the Central Government holds 100% stake in the company.

Earlier the Finance Ministry had indicated that the power PSUs in which Government stake is being partially diluted would hit the market by the end of the first quarter.

PGCIL has a paid-up capital of Rs 3,800 crore. The shares would have a face value of Rs 10 each and the premium would be decided through the book building route.

The company posted a net profit of Rs 799 crore for 2006-07 and plans to make total investment of Rs 55,000 crore during 2007-12 to take inter-regional power transmission capacity to 37,000 MW from the present level of approximately 12,000 MW, reports The Hindu Business Line.

Monday, April 09, 2007

Virtusa Corp files for IPO

Technology outsourcing provider Virtusa Corporation has filed with the US Securities and Exchange Commission for a proposed initial public offering, IPO.

JP Morgan Securities Inc will be the sole book-running manager for the offering, with Bear Stearns & Co as the lead manager and Cowen and Company, LLC and William Blair & Company as co-managers.

However, the number of shares and the price range has not yet been determined.

The company founded in 1996 and headquartered in Massachusetts, has offices in the US and the UK and global delivery centres in Hyderabad, Chennai and in Sri Lanka.

According to some reports in the US, the IPO would potentially raise up to USD 90-100 million, and of this, funds would be utilised in expanding facilities in India and Sri Lanka and for working capital. The company has grown its operations over the last three years in India and its investors include Sigma Partners, Charles River Ventures, Globespan Capital Partners and Focus Ventures. It has secured some USD 20 million in funding about three years ago. The company had acquired about seven acres of land from the Andhra Pradesh Government to develop its own campus, reports The Hindu Business Line.

Thursday, April 05, 2007

Coal India public offer likely in FY08

Coal India is likely to enter capital markets with a public offer in FY08.

CIL has an equity base of Rs 6,316 crore. It is the holding company of seven coal producing companies.

They are: Northern Coalfields, South Eastern Coalfields, Western Coalfields, Mahanadi Coalfields, Eastern Coalfields, Bharat Coking Coal and Central Coalfields.

CIL is also the holding company of Coal Mining and Development Planning Institution, the R&D arm.

According to the plans, CIL is likely to go public and not its subsidiaries.

Godrej Properties plans IPO to fund expansion

Godrej Properties, the real estate arm of the Rs 6,500-crore Godrej Group, plans to tap the capital market for funds during the current financial year.

Confirming this, Milind Korde, managing director, Godrej Properties, said, “We are in the process of appointing merchant bankers to do a due diligence.”

Godrej Industries owns 81.69% of Godrej Properties.

“We will float an IPO at the right time. We are currently finalising the modalities and will decide the structure very soon,” Korde said. He did not rule out a pre-IPO preferential placement.

Godrej Properties is currently developing properties across several metros. It plans to develop properties admeasuring about 20 million sq ft in Mumbai, Bangalore, Pune, Hyderabad, Kolkata and Chennai. These include residential, IT parks and commercial establishments.

The real estate player plans to convert the IT Park it’s developing at Hyderabad, spread over 6 million sq ft, into an IT-SEZ, Korde said. Godrej Properties had purchased the property on an outright basis from Rallis India, a Tata Group company.

The company is also looking at developing an integrated state-of-the-art township in Mumbai (Kalyan) and Bangalore with an area of 1 million plus sq ft.

Godrej Properties is now shoring up its land bank. “We have entered into MoUs with land owners for acquiring several tracts of land. The process is underway and would materialise very soon,” he said.

Commenting on the rising home loan rates Korde said, “The high rate of interest is a sentimental issue in the short term. However, demand is still high, with salary levels going up.”

Korde said the real estate players need to realise that only a model based on “reasonable pricing with huge volumes” could eventually work, reports DNA Money.

Wednesday, April 04, 2007

Central Bank shortlists 5 bankers for public offer

Central Bank of India, a mid-sized Mumbai-based public sector bank, has finalised five merchant bankers for its initial public offer. The IPO, expected by end-May 2007, is expected to raise around Rs 1,000 crore equity capital.

Central Bank of India, a mid-sized Mumbai-based public sector bank, has finalised five merchant bankers for its initial public offer (IPO). The IPO, expected by end-May 2007, is expected to raise around Rs 1,000 crore equity capital.

The bank has received all regulatory clearances for converting about 71% of its large equity base into preference shares. The proposal for conversion of shares, which was stuck at the Reserve Bank of India (RBI), was recently cleared by the government.

The RBI was averse to allowing banks to convert 70% of their equity into preference shares. Earlier, the RBI had sought to put 40% cap on conversion of equity into preference shares.

Central Bank officials said of the Rs 1,124.14 crore equity capital, Rs 800 crore would be converted into preference shares. The conversion will lower the bank’s paid-up equity capital to Rs 324.14, which will help the bank price its IPO better as its earnings per share improve.

The bank has appointed IDBI Capital markets, Kotak Securities, ICICI Securities, Citigroup and Enam Financials as the lead book-runners.

The bank is negotiating with the government for the coupon rate on the preference shares. The government wants a floating coupon rate of 100 basis points above the Reserve Bank of India’s (RBI) repo rate, which is currently at 7.75%. The RBI lends overnight funds to banks at the repo rate.

Central Bank, which had planned to get listed in the fourth quarter of 2006-07, as on December 31, 2006, had a total business of Rs 1,21,301 crore, comprising deposits of Rs 74,974 crore and advances of Rs 46,327 crore, reports Business Standard.

Fortis Healthcare fixes IPO price band at Rs 92-110

Fortis Healthcare, FHL is entering capital market with a public issue of Rs 10 each. It fixed issue price band at Rs 92-110 per share.

The issue opens on April 16 and closes on April 20, 2007.

FHL currently has a network of 11 hospitals primarily in North India and 16 satellite and heart command centers (including one heart command center in Afghanistan). The hospitals include multi specialty hospitals, as well as super-specialty centers providing tertiary and quaternary healthcare to patients in areas such as cardiac care, orthopedics, neurosciences, oncology, renal care, gastroenterology and mother and child care. The hospitals that FHL manages include Fortis La Femme, a "boutique" style hospital that focuses on women's health and maternity care.

The book running lead managers to the issue are JM Morgan Stanley, Citigroup Global Markets India and Kotak Mahindra Capital Company.

Tuesday, April 03, 2007

BEML plans Rs 440cr follow-on issue in June

BEML has slated its public issue - to raise Rs 440 crore by offloading 49 lakh shares - for the first half of June this year.

The follow-on issue will mainly finance the modernisation and expansion plans of its metro coach production infrastructure at Bangalore, V.R.S. Natarajan, chairman and managing director of the defence public enterprise, told a news conference on Monday. Internal accruals would partly fund the expansion - Rs 230 crore for metro infrastructure and Rs 150 crore for modern machinery.

The plan is to raise the output to around 300 coaches a year to meet the estimated demand for 1,000 coaches in a couple of years as many States have announced metro projects. Metro and rail coach business is around 10-15% of the turnover; mining and construction equipment around 55%; and 35-40% is from defence orders. Currently, the Government of India holds 61.23% of the shares in BEML; UTI, banks and FIs hold 23.12%; and non-institutional investors 15.65%. The BEML scrip closed Rs 21.5 lower at Rs 1,061 in a day of falling indices.

Salex tax reprieve

The Karnataka Government's five-year sales tax exemption for metro coaches would give it a competitive edge in bidding for the Delhi metro and other projects, Natarajan said. DMRC alone has placed a bid for 312 coaches.

Part of the issue proceeds will also foot the VRS bill of Rs 90 crore to cover 1,000-1,200 unskilled workers over the next five years.

Currently, around 100 employees are opting to exit each year and this number may rise.

BEML is strengthening and retaining its engineering pool and hiring 200-300 diploma and graduate engineers a year. "Now that we have gone in for ERP, the dependence on clerical staff will come down," Mr Natarajan said.

A Rs 25-crore captive wind energy project is being planned at Chitradurga through a turnkey contract with Suzlon.

Profits up 10%

BEML closed the just ended 2006-07 year with a provisional profit before tax of Rs 315 crore, or 10% growth year on year. Provisional turnover was up 18% recording its highest ever figure of Rs 2,600 crore. Exports were Rs 110.05 crore. The larger plan is to touch Rs 5,000 crore by 2013, its 50th year.

For the current year, Natarajan said the company had a sales target of Rs 3,200 crore and exports of Rs 125 crore.

The order book of Rs 1,617 crore was likely to swell to Rs 2,300 crore as more orders are coming, he said, reports The Hindu Business Line.

Monday, April 02, 2007

RPG weighs IPO option to fund retail expansion

RPG Enterprises is planning to set up 20 Spencer's stores, one of the largest supermarket chain, in different formats in Kolkata.

It recently opened the first two Spencer's Dailies in Kolkata that stock about 5000 products including fresh fruits and vegetables, personal and home care products, food and grocery.

The company has earmarked an investment of close to Rs 1,000 crore for expansion throughout the country.

Although majority of the funds would be raised through internal accruals, RPG Enterprises also proposes to raise funds through an IPO for its retail expansion plans, but it could opt for a public issue, private equity or private placement.

"This would be announced in the next 12 months," informed Sanjiv Goenka, vice-chairman, RPG Enterprises.

The company expects 25-30% of its total revenues to come from its retail business, from the present 5%, with the Rs 11,000 crore RPG group's retail business expected to touch close to Rs 700 crore in 2006-07. The company recently inaugurated 2 of its Daily formats in Kolkata and plans to open four Hypers this year.

The city would soon have RPG's biggest hypermarket of India covering 74,000 sq ft, larger than the one it opened in Gurgaon that covers close to 65,000 sq ft, Goenka said. These would offer more than 25,000 products - groceries, fresh fruits and vegetables, home appliances, white goods and luggage, at competitive pricing.

Kolkata would also have two more hypermarkets, functional by July this year, of close to 40,000 sq ft and 55,000 sq ft, with the state's first Hypermarket scheduled to be inaugurated before April 15 in Durgapur.

"We are looking at setting up stores in lucrative tier II towns and cities also including Aurangabad, Trichy, Madurai, Mangalore and Durgapur ," Goenka said.

RPG, at present, has a total of 400 retail outlets which is expected to grow to 2000 stores by 2009 and 4000 by 2011.

At present, there are 125 Spencer's stores across 25 cities in India, comprising 8 Hypermarkets, 5 Spencer's Super Stores, 104 Spencer's Daily, 3 Spencer's Fresh stores, and 5 Spencer's Express stores, reports Business Standard.