Bangalore: Bharat Earth Movers Ltd plans to raise Rs440 crore through a public issue in June, as the company continues to eye new business opportunities to fuel growth, senior officials said on 2 April.
BEML’s chairman and managing director, V R S Natarajan, said the issue proceeds would be used to fund expansion, diversification and modernisation plans of the company, as also to offer voluntary retirement scheme for around 1,000-1,200 employees.
“We hope to hit the market in the first half of June. We are planning to raise Rs440 crore by issuing 49 lakh shares”, he told reporters here. “I don’t expect erosion of EPS (earnings per share)”, Natarajan said in response to a question.
BEML, which is mainly in the business of mining and construction, railway and metro and defence services, today reported a provisional earnings for the financial year 2006-07. The turnover of the company stands at Rs2,600 crore for 2006-07, up 18% compared to the previous fiscal.
Profit before tax rose to Rs315 crore, up 10%, he added.
It has an order of Rs1,670 crore at the beginning of this financial year and it is likely swell to Rs2,700 crore as it expects orders of Rs1,030 crore in a month or so, Natarajan said.
The company is targeting a turnover of Rs3,200 crore in 2007-08.
Natarajan said BEML is bullish about the opportunities in the engineering services outsourcing space, adding, it’s positioning itself as an end-to-end solutions provider. It will also pursue opportunities contracts under the offset clauses of Defence Procurement Policy.
BEML plans to spend 3% — Rs76-78 crore — of the turnover on R&D in 2007-08, up from two per cent in the last financial year.
As part of diversification plans, the company has finalised a business agreement with Nandan Petrochem Ltd to market machine lubricants under the brandname “BEML Oil”.
According to Natarajan, BEML would also set up a global spares depot in Malaysia to ensure that parts are flown to any destination in the world within 48 hours.
BEML has forged a joint venture with an Indonesian firm and a Hyderabad-based company to pursue opportunities in contract mining area.
The company cannot go on increasing capacity at its plants and, so, would step up outsourcing, he said.