• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

M. Ramesh

Chennai , Dec. 1

NOW that the Hinduja group is thinking of doing the Rs 165-crore foundry project under Ennore Foundries rather than Ashok Leyland, as was initially proposed, a rights issue from Ennore Foundries seems to be in the offing.

Senior sources in Ashok Leyland told Business Line on Wednesday that there is "no way" Ennore Foundries could put up the 50,000-tonne grey iron foundry project without raising fresh equity.

The current thinking is that Ennore Foundries would have to bring in fresh equity of Rs 50 crore to be able to raise loans of Rs 100 crore.

The remaining Rs 15 crore could come from internal accruals.

For fresh equity funds, the private placement route is not favoured as it would dilute the promoters' holding.

The promoters have an 80-per cent stake in Ennore Foundries; the Hinduja group-owned LRLIH of the UK holds 59 per cent and Ashok Leyland owns another 21 per cent.

The group also would not want to give the promoters a preferential allotment.

"We are not even thinking of it," a senior Leyland official said.

That leaves only a rights issue option.

Ennore Foundries turned around last year, as its fortunes swung in sympathy with the good times in the automotive industry.

The company which made a net loss of Rs 16.60 crore on a turnover of Rs 131.6 crore in 2002-03, staged a turnaround in the following year; in the year ended March 2004, Ennore Foundries reported a turnover of Rs 185 crore and a net profit of Rs 4.18 crore, resulting in an earnings per share (EPS) of Rs 6. Most of it came in the fourth quarter of the year, when it reported a net profit of Rs 3.40 crore.

"For the current financial year, we expect the company to report a net profit of around Rs 9 crore-Rs 10 crore, resulting in an EPS of Rs 13-15," said Mr Ashish Chugh, a New Delhi-based equity analyst and investment consultant.

On Wednesday, Ennore Foundries closed on the BSE at Rs 108.15, a good Rs 5.15 over the previous close and witnessed a volume of 8,761 shares.

More Stories on : Rights Issue | Engineering

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Volatile movement

Copyright © 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line