The Hindu Business Line : Indo Asian Fusegear draws up Rs 55-cr plan for expansion

The company is planning to enhance production capacity across various product segments and has drawn up a Rs 55-crore investment plan for the purpose.

The Chairman and Managing Director, Mr V.P. Mahendru, says that only about Rs 15 crore of this will be generated through internal accruals.

"We have chalked out an investment plan as per which about Rs 15 crore will be raised through internal accruals, another Rs 15 crore by raising debt but the remaining Rs 25 crore may require placement of equity with financial institutions. We have been approached by several financial institutions and foreign institutional investors and negotiations are on," he told Business Line.

He said that the equity could be placed with either domestic or foreign financial institutions and a decision on this would be taken within the next two-three months.

As per the expansion plan, the manufacturing capacity of the circuit protection plant at Noida will be doubled to 30 million units and at the one manufacturing compact lamps to 10 million units.

The company is also foraying into the manufacture of energy meters with a 5-million-unit production target next fiscal, besides eyeing 10,000 km of wire and cable manufacturing.

Mr Mahendru said Indo Asian Fusegear was also scouting for acquisitions in Europe. "We are in talks with some European companies to either acquire a small stake in a viable venture or to set up a joint venture. The envisaged investment for the purpose is up to Rs 30 crore."

Yet another growth driver will be the proposed merger of Indo Kopp (a joint venture between Indo Asian Fusegear and German company Heinrich Kopp) with the company.

The merger, that is awaiting permission from the High Court, is expected to be completed this fiscal and as per the proposed terms of this merger, Indo Kopp promoters will get preference shares worth Rs 17 in Indo Asian Fusegear for every Rs 10 share held in Indo Kopp.

Mr Mahendru said that after the merger process is completed, promoter stake in Indo Asian is expected to remain at the current 51 per cent level. "This merger will provide immense synergies and prove beneficial for the shareholders of Indo Asian. Not only do we get access to technology, we have already begun to secure lucrative contracts from places like Europe," he said.

While the expected turnover for Indo Asian Fusegear for the current fiscal is Rs 120 crore, post merger the company is expecting about a 90 per cent jump in sales to Rs 225 crore in 2005-06.

For the year ended March 31, 2004, Indo Asian posted Rs 84 crore sales and other income whereas profit after tax was recorded at Rs 1.6 crore.

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