Mumbai, Sept. 2
WELSPUN India Ltd announced that second phase of its expansion at its Anjar unit will start soon. The expansion is estimated to cost Rs 650 crore and will be funded through a mix of debt and equity.
According to the company, Rs 400 crore will be raised as debt, mostly loans from TUF at roughly 3 per cent; Rs 165 crore has already been raised by way of equity or warrants to Temasek and the promoters of Welspun and, Rs 85 crore through internal accruals. There will be no equity dilution to fund the project.
The proposed expansion is expected to contribute to the company's topline by the second quarter of 2006-07. This is expected to reduce the project completion cycle significantly.
The expansion will include enhancing existing towel, bed sheet and spinning facilities and also enter the decorative beddings segment.
Welspun intends to expand weaving capacity by 10,000 tonnes a year. Since the company is targeting the higher thread count business, it has decided to enhance inhouse capacities of weaving facilities by 30 million meters per annum. It is expected to result in optimisation of production costs and allow the production of a wide range of high-end products.