The Hindu Business Line : Varsana Ispat plans Rs 300-cr expansion

Ahmedabad, Dec.18 Varsana Ispat Ltd, the Kutch-based integrated tower and steel manufacturing company, is set to invest Rs 300 crore to expand its transmission tower manufacturing capacity from the existing 14,000 tonnes per annum(TPA) to 1.20 lakh TPA next year.

The company, which started commercial production at its Varsana (Gandhidham) plant in December 2005, had achieved its transmission tower unit capacity of 14,400 TPA only three months back. In view of the current order book — entire capacity being booked till March 2008 — the company also plans further augment the capacity to 1.56 lakh TPA , Mr Akshay Jhunjhunwala, Chief Executive Officer, told Business Line .

Turnover, clients

In the current fiscal, its turnover is projected to double to nearly Rs 300 crore from Rs 150 crore in 2006-07, he added. Varsana is 20 km from Kandla Port and 50 km from Mundra Port. Varsana Ispat is currently supplying transmission towers to Karnataka Power Ltd, BSNL and Global Teleservices Ltd (GTL) and is in talks with Bharti and Reliance groups as well, he said.

Funding

The expansion would be part-funded through the raising of funds to the extent of Rs 200 crore from the private equity and an IPO next year, and partly through internal accruals, Mr Jhunjhunwala said. For the pre-IPO placement of equity, the company is talking to three to four investors. The expansion plan includes setting up of a captive power plant of 36 megawatt that will use imported coal and lignite to meet the company’s power requirements.

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