Mumbai: State-run mining and construction equipment maker, Bharat Earth Movers Ltd (BEML), plans to raise around Rs450 crore through a follow-on share issue, a top official said on Wednesday.
The 4.9 million share offer, constituting 11.77% of the post-issue capital, will open on 27 June and close on 3 July. The company will announce the price band on 25 June.
The funds raised would part-finance BEML’s planned capital expenditure of Rs900 crore, with the balance coming through internal accruals.
“The investment is necessary in order to achieve our revenue targets,” chairman and managing director, V.R.S. Natarajan, said.
The state-run firm hopes to double revenue to Rs5,000 crore by 2013-14, from Rs2,600 crore in 2006-07. It reported a provisional net profit of Rs315 crore in 2006-07. “We expect business to grow at 25-30% per annum in the next few years, so we should reach our targets earlier,” Natarajan said.
The company expected strong growth from the contract mining segment which it recently entered, because the focus on thermal power generation in India would boost coal demand, he said. Natarajan said the company was betting on wagon orders, with 12 metro projects coming up across the country. It would invest part of the issue proceeds to expand its metro coach facility in Karnataka, and set up a research unit for coaches.