Bilpower hives off Wada unit to Bil Energy Systems

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Bilpower is transferring their Wada unit to Bilpower Energy Systems, a wholly owned subsidiary company of Bilpower. This will mean more shares for shareholders.

In an interview with CNBC-TV18, Ashok Bansal, Chief Financial Officer of Bilpower, discusses it.

Here is a verbatim transcript of an exclusive interview with Ashok Bansal on CNBC-TV18. Alos watch the accompanying video.

Q: What is the primary trigger for this hiving off and giving fresh shares? Are you looking at fresh investments for your Wada unit?

A: This is Bill Energy Systems. The module of difference is entirely different. We are operating in stamping manufacturing in the Wada unit and there we are supplying to OEM manufacturers. We believe that this is one of the largest units of stamping in India and this doesn't gel with the lamination manufacturing in which we are carrying out in the other unit.

The business sector is entirely different to which we are catering in Bil Energy Systems and in Bilpower we are catering to mainly lamination buyers which are transformer manufacturers.

Q: How did you arrive at the valuation?

A: Valuation is very simple because we were told in the evening that every shareholder of Bilpower will get shares of Bil Energy Systems which is presently our subsidiary. Since every shareholder is getting one share, Bil Energy Systems would be issuing one share of Bil Energy to Bilpower shareholders.

Q: Is the idea of hiving off intended also to get a strategic or a JV partner or get more funds infused into the transfer division?

A: Honestly not really because whatever investments we were looking at we have already made in Bilpower Wada which is now Bil Energy Systems. For the next six to eight months, we would be looking at consolidating the business and maybe become the leader in India in this sector.

Q: Is it an eventual plan at least, otherwise why would you transfer it?

A: Every business would think of growing which we are also doing. For that purpose, we need collaborations, investments and strategic partners which is every businessman's dream.

Q: Would you be raising money, at least in Bilpower?

A: No.

Q: No fund raising plans?

A: No. We are bringing our IPO in our subsidiary Tarapur Transformers Ltd. That is in the very near future. We have already filed a DRHP and it is approved by BSE.

Q: When is that likely to hit the markets?

A: Probably in the last week of March or in the first fortnight of April.

Q: Give us some idea of this Tarapur Unit?

A: This is a power transformer manufacturing unit and we are looking at raising approximately Rs 60-65 crore in the IPO. After the fund raising program is complete, through this IPO the debt equity ratio would be less than the equity.

Q: Will you be selling any stake or is it entirely fresh shares that you would be offering in Tarapur?

A: Entirely fresh issue. We are not selling any stake. We would be holding on to our stake.