Comments
The Chennai-based Murugappa group plans to make Rs 1,500-crore of capital expenditure in 2011-12, which is more than thrice that in 2010-11 and five times as much as in 2009-10.
The group, five of whose companies turned in their “best ever performance” last year, has the wallet power to invest in capacities and is also looking to businesses with more confidence, the group's Executive Chairman, Mr A. Vellayan, told a press conference here today.
The bulk of the capex (Rs 500 crore) will go into expansion of the group's fertilisers business, which falls under Coromandel Fertilisers Ltd. Part of the reason for the expansion is the fact that the group's joint venture in Tunisia (in which it has a 15 per cent stake) will go on stream by September and the phosphoric acid that it will produce can feed Coromandel's plant in Andhra Pradesh. (But for the recent turbulence in Tunisia, the plant was supposed to have commenced operations by now.)
Tube Investments of India, the oldest and flagship company of the group, will also invest Rs 500 crore across its businesses — cycles, tubes and strips and metal forming. The remainder of the proposed investments would go into Carborundum Universal and EID Parry, Mr Vellayan said.
He said the group may tap external borrowings for about Rs 400 crore.
He said that last year, the group's turnover grew 25 per cent to touch Rs 17,051 crore. The group is on course to achieving its vision of a turnover of $7.2 billion (about Rs 32,400 crore) by 2013-14, he said.
The profitability of its sugar business was impacted by depressed sugar prices in 2010-11. With the acquisition of 65 per cent equity stake in GMR Industries and a unit of Sadashiva Sugars in 2009-10, EID Parry has emerged as the largest integrated sugar producer in India.
NBFCs
Cholamandalam Finance would venture into financing gold against loans from August and expects to disburse about Rs 350 crore and set up 45 branches across South India. Mr N. Srinivasan, Director, Finance, Murugappa Group, said Cholamandalam had regained its status of an ‘asset financing company' as on March 31, 2011. Only if 60 per cent of a non-banking finance company's disbursements go into asset financing would it qualify to this category. The asset financing tag helps it get better ratings and, therefore, avail of credit at lower rates.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.