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Business News/ Opinion / Online-views/  BEML to raise Rs450 cr through FPO
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BEML to raise Rs450 cr through FPO

BEML to raise Rs450 cr through FPO

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PTI

Mumbai: Mini-ratna Bharat Earth Movers Ltd (BEML) said on 20 June it plans to raise Rs450 crore via a follow-on public (FPO) issue, to part-finance its Rs900-crore capex programme over a period of three years.

The issue, opening on 27 June, would constitute 11.77% of the company’s fully-diluted post-issue equity capital. Post-issue, the government’s stake would come down to just above 51% in BEML.

“Our follow-on public issue of 4.9 million equity shares of 10 each will remain open for subscription for seven days ending 3 July," the company’s chairman and managing director, V R S Natarajan, said here.

The price band for the issue has not been finalised yet and will be known at least one day before the issue opens, he added.

The investment, he said, was needed to fuel the company’s growth plan and would also help it to achieve the revenue target by 2010-11 or latest by 2011-12.

The company has set a revenue target of Rs5,000 crore by 2013-14 from Rs2,600 crore last fiscal.

Natarajan said BEML would invest Rs304.5 crore of the issue proceeds for expansion and upgradation of its Metro coach manufacturing plant in Bangalore, besides setting up a 5MW wind mill for captive consumption for Rs27 crore.

The company also plans to invest Rs9 crore towards development of its R&D Centre of Excellence for metro coaches and towards a Voluntary Retirement Scheme for employees.

Natarajan said the company would contribute Rs450 crore from internal accruals for its Rs900 crore capex programme, of which investment to the tune of Rs290 crore for the current fiscal has already been approved by its board.

On the revenue target, he said that the company aims to garner 60% of its targeted Rs5,000 crore revenue from its mining and construction equipment business, 30% from defence products and the rest from railway and metro products industry.

“In all the sectors we operate, there is a tremendous scope for growth and we want to cash in on the prospect by stepping up our activities," Natarajan said.

In 2006-07, he said the company posted ,700 crore revenue from mining, 750 crore from the defence sector and the rest from railway and metro products industry.

Natarajan said the company has also recently opened two separate business divisions namely technology and trading.

The technology division would provide engineering design software solutions and the trading division would market non-BEML products in domestic and global markets.

ICICI Securities would act as the book-running lead manager, while Karvy Computershare would be the registrar to the issue.

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Published: 20 Jun 2007, 06:52 PM IST
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