rajendra mech

Incorporated in 1970, Rajendra Mechanical Industries belongs to the Remi group. The company is promoted by Chiranjilal Saraf along with his two sons, V C Saraf and Rajendra C Saraf. The company manufactures stainless steel seamless and welded pipes and bright bars at its manufacturing unit in Andheri,Mumbai. It obtains technical assistance from Kobe Steel, Japan. In 1994, the company diversified into real estate. It shifted its manufacturing facilities to Tarapur and developed an industrial complex at the Andheri site,The Comapny obtained ISO 9002 certificate from TUV. The company has also developed some property in Andheri, Mumbai. The company caters to following user industries-Petrochemicals, Refineries, Fertilizers and Pharmaceutical industry. Some of the customers include IOCL, IPCL, GNFC, IFFCO, Madras refineries, Mangalore refineries and Ranbaxy Laboratories. Tubes manufactured by the company also find user base in power projects (BHEL). The company has an annual capacity of 4500 tonnes with 2/3rd of the capacity which can be utilized for both welded and seamless pipes and tubes. The company is operating at 80% capacity utilization rate. The company is expanding the capacity to 5500 tonnes, which will fully stabilize starting FY07. The company imports seamless pipe to convert them into various sizes as required by its clients from various user industries. Import of seamless pipes is done against the exports done by the company. Average cost of seamless pipes is $4000/tonne. Out of the total capacity 75% is utilized for welded pipes and rest for seamless pipes. Seamless pipes and tubes have an average realization of Rs 350/Kg and Rs 140/Kg for welded stainless steel pipes. The company in September 2005 has bought out condenser tube manufacturing unit (IDCOL) based in Orissa for Rs 10 crores. This unit has an annual capacity of 1000 tonnes, which depending on the order flow will be expanded. Average realization for condenser tube is Rs 250/Kg. The company expects additional 20-25 crores from this unit once the operations are stabilized. This product finds user base in thermal power stations and other power projects. This unit was initially set up to cater to BHEL. The company will also continue to supply to BHEL. The company has dismantled the equipment and placed it at Tarapur (MIDC) in Maharashtra. The company has also installed a 1.6 MW windmill project (February 2006) in Maharashtra for a total cost of Rs 8.5 crores. It will supply to MSEB for Rs 3.5/unit, with an escalation clause of Rs 0.15/ Unit every year. The company will enjoy a tax shield with 80% depreciation for six months. The company also has a 12000 square feet space, which they have developed and have leased out for which they annually get Rs 5 mn as lease rent. The total project cost for funding the acquisition and windmill project is Rs 22 crores. Project cost is funded through Debt (15 crores) and rest through preferential allotment (15 lakh shares @ Rs 34). After the preferential allotment, the equity capital has risen to Rs 47.9 mn.