New project to commence in Mar '09: Sejal Glass

Sejal Architectural Glass, a glass processing house in India, will open for subscription today with an initial public offering (IPO) of 91,94,155 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

Amrut Gada, CMD, said a new project will commence in March ‘09. All projects, construction and installation of the machinery will be completed by February ‘09.

Excerpts from CNBC-TV18's exclusive interview with Amrut Gada:

Q: If you can tell us what kind of revenue growth you have been seeing and will see in this business, also take us through the main contours of your business?

A: Right now we are a glass processing, glass solution provider, which is right now applied in the architectural segment or if you see the latest buildings which have the application of glass. Our core business is architectural glass that is insulating glass, toughened glass and laminated glass. We also have the trading division where we have the display of around 30,000 square feet at Kandivili in Mumbai, where we have the display of the sanitary items, ceramics tiles, lightning and other arts and craft.

Q: What is the percentage that glass occupies in your business and in the trading activity how much?

A: 95% is glass and trading activity is 10%.

Q: In terms of the time line of the objects of the issue after the IPO hits the markets and you raise the money, what is the timeline that you are giving in terms of your new projects taking shape and coming on stream?

A: The new project will be commenced in March ‘09. We will complete all our projects, construction and installation of the machinery by February ‘09 and the trial run we will start in February second week. So the commercial production will be in March third week or second week.

Q: How much will your capacity increase after this capital expansion is complete?

A: It’s a 550 tonne per day capacity that is around 2,00,750 tonne (two lakh seven hundred and fifty tonne) per year capacity.

Q: What is your current capacity?

A: Currently we are not making the float glass production. It is a backward integration for our company, right now we are buying the float glass from the market, for our processing.

Q: Your margins are at around 17-18%. Will they significantly improve after March ’09 when your backward integration is complete? What can your margins improve to?

A: That can have a little bit of impact, but definitely there will be an impact on the bottomline of the company.

Q: In terms of your numbers, your sales have remained flat for the nine-month period. I have of course seen your Profit After Tax (PAT) growing significantly. Assuming that your expansion is coming on stream only post March 2009, would you believe that the growth expected even in the next year without the expansion plan coming in will be very robust?

A: We are into solution providing and we have good order in hand and so we are confident that we will achieve the target.