HEG sells its 4.4% stake in Bhilwara Spinners

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In an interview with CNBC-TV18, Manvinder Singh Ajmani, CFO of HEG spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of the interview. Also watch the video.

Q: What is the reason for stake sale and post this what would the stake of Bhilwara Spinners be?

A: We as a group have investment in Bhilwara Spinners and as per the group decision we have hived off the company.

Q: It doesn't mean much in terms of money, isn't it? It's just about half a crore?

A: No, it doesn't.

Q: Talking about your expansion, can you take us through what is the capex plan and what is the expansion that is coming on-stream in this current year?

A: We have recently expanded our capacity to about 66,000 tonne and we are taking another expansion to take our capacity to about 80,000 tonne. This capacity expansion will take about 18-21 months and we will be ready by last quarter of 2011.

Q: How would this capacity expansion augment your revenues next year?

A: Next year there will be hardly about a quarter or quarter and half's impact in FY11-12. But the expanded capacity of 66,000 tonne is almost available now and that will help us in most of the FY10-11.

Q: How do you expect margins to pan out in the current year itself? Will you be raising any money for this expansion?

A: We do not plan to initially raise any money. This expansion will be largely internally funded.

Q: You have done about Rs 800 crore of revenues for the nine-month period. If you could break it up for us in terms of how much you have done in terms of exports and post this capacity coming on stream how much of incremental revenue does you expect for the export side of the business?

A: Our turnover ratio is roughly about 75% export, 25% domestic at the moment. In the next financial year, we expect it to be about 80% for export and 20% for domestic.