The Hindu Business Line : Khaitan Electricals allots pref shares

The plan
Khaitan Electricals, which is well known for the Khaitan branded electrical fans, is in the process of launching a wide range of electrical items.
Apart from the promoters' investment, a part of the funding would be done by internal accruals.

Kolkata , March 31

Promoters of Khaitan Electricals Ltd, a diversified electrical products company, has made a fresh equity investment of Rs 6 crore to fund its ongoing expansion programme.

According to Mr Sunil K. Khaitan, Vice-Chairman and Managing Director of Khaitan Electricals, the shares were allotted on a preferential basis to the promoters.

Ten lakh equity share warrants with a face value of Rs 10 were issued. A premium of Rs 50 was charged on each share warrant. With this development, promoters' stake in the company increased to over 55 per cent from approximately 48 per cent.

Khaitan Electricals, which is well known for the Khaitan branded electrical fans, is in the process of launching a wide range of electrical items. The company would like to make itself a one-stop-shop for all types of household requirements.

About six months ago, the company launched a wide range of CFLs (compact fluorescent lamps), MCBs (miniature circuit breakers) and RCCBs (residual current circuit breakers).

These products are manufactured at a plant located at Paonta Sahib in Himachal Pradesh. "The money we have invested would be utilised in the ongoing expansion project in this factory," Mr Khaitan told Business Line. Total cost of the expansion programme is Rs 20 crore. According to Mr Khaitan, apart from the promoters' investment, a part of the funding would be done by internal accruals. "We may go to banks for debt if required," he said.

New products

Meanwhile, in another development, Khaitan Electricals launched water heaters under the Khaitan brand name. However, the product is not manufactured by the company. It is being outsourced from a local player. "In fact, we are launching a new product almost every month. Next month we have planned to launch electrical switches both premium and general," he said. In the last financial year, 2004-05, Khaitan Electricals registered a gross profit of Rs 5 crore on a total turnover of Rs 129 crore. In the current financial year, Mr Khaitan hoped that the turnover would rise to Rs 200 crore. In the fan business, the company enjoys a 15 per cent national market share. It sells more than 1.7 million fans every year.

More Stories on : Preferential Allotments | Electrical Goods | New Projects

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