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Ramkrishna Forgings: IFC to take a call on investment after review

Our Bureau Kolkata | Updated on June 01, 2012

Mode of funding not disclosed

The board of directors of International Finance Corporation (IFC) will take a call on a proposed investment of around $20 million in Ramkrishna Forgings Ltd on June 27.

In a disclosure on its Web site, IFC said it would review the proposal for Ramkrishna Forgings entailing a total capital expenditure plan of $97 million.

“The expansion programme will include brownfield expansion and technology upgrades in its existing facilities (such as replacement of oil fired furnaces with induction furnaces) and construction of a greenfield facility at Jamshedpur to manufacture front axle beams for commercial vehicles, with machinery imported from Germany,” it said.

Project location

The project will be undertaken at either of the two available sites identified at either at land being leased from Adityapur Industrial Development Authority on the outskirts of Jamshedpur or 25 acre land purchased at Bholadih, in Seraikella district of Jharkhand. IFC, however, kept the mode of funding under wraps till the review.

Ramkrishna Forgings produces carbon and low alloy steel forgings for railways, automobile and engineering industry.

According to Mr Rajesh Agarwal, research head of Eastern Financiers, Ramkrishna Forgings is looking to enhance its product portfolio for commercial vehicles to be financed through debt-equity ratio of 65:35.

“Once the capacity becomes operational may be in FY15, the stock would witness a re-rating on the bourses”, he added. ICRA in July 2011 revised upwards its debt ratings and said its long-term rating outlook was “stable”.

Its existing forging facility comprises hammer forge and up-setter forge with a total capacity of 37,700 mtpa and a ring rolling unit with a capacity of 24,000 mtpa.

Promoters have increased stake in May to 53.09 per cent from 52.65 per cent in March. On Friday, the shares of Ramkrishna Forgings finished at Rs 120.60, down 3.56 per cent, on the BSE.

>jayanta_mallick@thehindu.co.in

Published on June 01, 2012

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