Hinduja Foundries is planning to come out with Rs 125-crore rights issue even as the country’s largest casting maker is facing delay in its proposed plant at Toopran in Andhra Pradesh. The company would vacate the land acquired for that endeavour if it does not receive one more year’s extension. The firm, with three plants now, has sought to restructure its loans to the tune of Rs 205 crore. The investment of Rs 70 crore is towards equipment for capacity balancing and machining. The company is equally focused in improving capacity utilisation by 30 per cent. There are also plans to expand our capacity and commence supplies in the larger weight segment of up to 500 kg casting weight.
Last year, the company had raised Rs 50.27 crore by issue of equity shares on a rights basis. One of the main objectives, constituting more than 50 per cent of the issue size, was capital expenditure on the existing plants. As for its plan to set up a green-field manufacturing unit at Toopran, the company recalled that it had already acquired 60 acres of land from the state government — and paid Rs 15 crore. The transfer of land was conditional on the commencement commercial production by the end of the current financial year. However, since we were unable to complete the project within the time allotted due to adverse market conditions, the company sought and received an extension upto March 31, 2012.
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