The company is planning to raise around Rs45-50 crore. Its board is meeting tomorrow to decide about the instrument to raise this capital.Its MD Srinivasan Singh says that the raised amount will be used for capitalexpansions and also for augmenting its working capital.
Excerpts from CNBC-TV18's exclusive interview with Srinivasan Singh:
Q: Going forward what is the finance McNally Bharat wants to raise in valueterms ?
A: In monetary terms, it may be around Rs 45-50 crore.
Q: What are the routes that you would like to use for raising this and how soon does the company want to raise this money?
A: There are 3-4 different options. It maybe an FCCB or preferential sharesissue. Tomorrow we have a board meeting, where we will take a final decision. We would like to make the plan in a manner so that we are able to get our funds latest by mid-June.
Q: Where would you deploy this money? Are you looking at some expansion plans?
A: We are increasing our activity level dramatically. This year our turnoveris around Rs 350 crore. Next year, we are expecting around Rs 600 crore; andfor the following year, it should be around Rs 750 crore. There are plentyof orders in the market for our line of business.We are also trying to expand our factories in two different places. So we need some money for capital expansions and also for augmenting our workingcapital.*
Q: What is your order book position as of now?
A: We have Rs 750 crore orders on hand.
Q: How much more orders do you expect?
A: We are well placed. There are two tenders, which are approximately of Rs260 crore. These will be decided by mid May or April end. That will take our order book to around Rs 1000 crore.There are a number of orders, where we have participated though tenders forRs 1500 crore. If we get our share, it will be quite substantial. By the end of the year we would like to have an order backlog of Rs 800 crore, even if we reach the target turnover of Rs 500-600 crore during the year.
Q: What kind of expansion is this going to be ?
A: We have a factory around 250 km down south from Kolkata. We want to expand both in terms of hardware and software. We are trying to introducesome automatic machines and expanding our factory site to take care of ournew type of business, which we have entered into.
Q: Given the strong order book position, what kind of growth can we expecton your margins?
A: We are expecting good growth from hereon. But in this project business,which we are in, most of the orders are of long-term nature in terms ofexecution. Increase in steel prices was a setback for the company. That is why, in our previous orders, which we had taken, the margins were slim. Eventhe market situation was not good either. Now, our turnover is going to increase. But more emphasis is being given onthe bottomline. So for the next few years, say by 2009-2010, we expect our turnover to be at least about Rs 1000 crore with margins of Rs 50-75 crore.
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