IMP Power may look at power plant foray

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about IMP Powers See previous management interviews See what other Experts & Brokerages are saying about IMP Powers IMP Powers BSE | NSE 28/05/12 Are Mutual Funds betting on IMP Powers?

Speaking to CNBC-TV18, Ajay Dhoot , MD at IMP Powers said they can look for fund raising in a couple of years. "In a couple of years, we may look at further expanding or diversifying into power plants." He added that they have 20,000 sq ft of land in Kandivali and options are open for looking into it.

 

Excerpts from CNBC-TV18's exclusive interview with Ajay Dhoot:
 

Q: Take us through you expansion plans. What exactly is your transformer business capacity now and where do you see it 12 months from now?

 

A: We have installed a capacity of about 3,600 MVA per annum, which we are expanding to 6,000 MVA. We had done Rs 30 crore expansion and it should be completed by June '08.

 

Q: Motilal Oswal Venture holds about 14% and Brescon Corporate and Promoters had subscribed to warrants at about Rs 164. Are you looking at further fund raising via this option of giving of stake to venture capitalists?

 

A: We are sufficiently funded at present in our expansion programme by Motilal Oswal and Brescon. At present, we do not have any expansion of giving further equity. But if the time demands, maybe in the future, we will look at it.

 

Q: What is the promoter holding currently?

 

A: Today, we are at 45% and post-equity dilution, after the CCPS is converted into shares, we would still be around 41%.

 

Q: You have some land at Kandivli. Do you have any specific plans for that?

 

A: We are manufacturing meters in that area. We have about more than 20,000 sq ft in Kandivli, where we are manufacturing meters and going into transducers and electronic meters.

 

Presently, we do not have any plans. But in the future, the options are open and rates are shooting up in real-estate. So, if any good proposal is there, we may look into it. But currently, we are not looking into that.

 

Q: Would you be looking at either developing it yourself or divesting it entirely?

 

A: If any good proposal comes in, we may look into it. But currently, we are continuing manufacturing and production of meters.

 

Q: Are there any fund raising plans?

 

A: Fund-raising has just been completed by Motilal Oswal and we are not looking at in the near future. But in a couple of years, we may look into further expanding or diversifying into power plants. We will definitely look into it.

 

Q: You have a CAGR of about 55% in your sales. Will you be able to maintain the run rate or better it?

 

A: In the last two years, we have maintained a CAGR growth of 45-50%. Definitely, in the next two years also, we are thinking of going at the same levels or maybe even exceeding that, once our expansion plans are over.

 

Q: What is the order book that you have at hand currently, in value terms? How much of it is domestic and how much of it is export?

 

A: Today, our order position is at about Rs 145 crore of net sales. About 60-65% is into going private, wherever the EPC (Engineering, Procurement and Construction) contractors are going and about 25% is going into electricity boards, utility boards, government and balance is export.

 

I do believe that our order book will remain at these levels only, because our realization from local is slightly better than export today.