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Vishwanath Sugar and Steel Industries, an integrated sugar manufacturer, plans to tap the capital market in May to raise Rs 374 crore. The funds will be utilised for doublings its sugarcane crushing capacity to 11,000 tonnes crush a day (tcpd), enhance power production to 66.40 MW from 36.4 MW and expand distillery capacity to 65 kilo litres a day from 35 kld.
Mr Mukesh Kumar, Executive Director, said the company has filed prospectus with SEBI and expects its approval by April.
“We will launch our issue in May, if the market condition is conducive. Ours is a unique company where the promoters hold 54 per cent and the rest is held by the farmers who supply sugarcane to us,” he added.
The company has postponed plans to set up a 0.5 million tonne steel plant after the mining ban in Karnataka imposed by the Supreme Court. “We will review the steel proposal after things normalise on the mining front,” he said.
Power agreement
The co-generation unit currently generates up to 29 MW, of which seven MW is used for captive consumption. Out of the surplus 22 MW, 14 MW is sold on a merchant sale basis under a Power Purchase Agreement with Tata Power Trading Company and the balance is sold to Hubli Electricity Supply Company at Rs 3.50 a unit under a long-term PPA.
The company pays farmers Rs 2,000 per tonne ex-field for the normal variety and Rs 2,200 a tonne for early maturing variety. An addition of Rs 400 is incurred on harvesting and transportation, said Mr Kumar.
Vishwanath Sugar also sells Indian made foreign liquor (IMFL) under its own brand Your Choice and Our Choice, targeting the mid- and lower-segment of the society in Karnataka.
“We will be able to produce about 24,00,000 boxes of IMFL products against 4,49,400 boxes produced currently, after successful completion of our proposed expansion plans.
We also plan to sell our products in Kerala, which is a larger market for IMFL products by itself,” he said.
For the year ended March 31, 2011, Vishwanath Sugar reported a net profit of Rs 43 crore, a growth of 2.3 times over the previous year. Its turnover grew 14.4 per cent to Rs 475 crore.
In the first quarter of this fiscal, its turnover was at Rs 67 crore and net profit was Rs 3 crore.
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