Kirloskar Brothers may transfer investments to subsidiary

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Kirloskar Brothers may transfer investments to subsidiary

R K Srivastava, Wholetime Director of Kirloskar Brothers, commenting on Kirloskar Brothers' plan to transfer some of its investments to Kirloskar Bros Investments, said, this move is being considered to bring in operational efficiency.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Stocks in news: Indiabulls Realty, EIH, Compact Disc, GMR ALSO READ See latest News about Kirloskar Bros See previous management interviews See what other Experts & Brokerages are saying about Kirloskar Bros Kirloskar Bros BSE | NSE 31/05/12 Are Mutual Funds betting on Kirloskar Bros?

R K Srivastava, Wholetime Director of Kirloskar Brothers , commenting on Kirloskar Brothers' plan to transfer some of its investments to Kirloskar Bros Investments, said, this move is being considered to bring in operational efficiency. He, however, added that the decision was still not finalized and it will be premature to comment on it.

Here is a verbatim transcript of the exclusive interview with R K Srivastava on CNBC-TV18. Also watch the accompanying video.

Q: Could you take us through what the order book is looking like? Power is the sector which is abuzz at this point in time. Are you seeing a sizeable jump in your order book?

A: We have an order book at around Rs 4,000 crore right now, and especially in the power sector we have quite a good market share in India. We do the pumping systems, circulating the water pumps, miscellaneous pumps, raw water pumps all kind of miscellaneous pumps for power plant. We are also doing some mini hydel. Mini hydel we do upto 10 MW.

Q: There has been an interesting board announcement right now which we need clarity on. Kirloskar Brothers is planning to transfer some of its investments to Kirloskar Bros Investments now both these investments in oil pneumatic and Kirloskar Oil Engine account about Rs 1,900 crore. Can you explain the rationale behind this Kirloskar Bros Investment still a holding on subsidiary how is it going to affect a shareholder of Kirloskar Brothers after this internal transfer takes place?

A: It is still not finalized so it will be premature to comment on anything.  But whenever, whatever will be done it will be taking care of all shareholders. I do not think anyone will get affected. 

Q: The broad rationale behind making this move?

A: It is under discussion so far but we want the operational efficiency separately to be seen apart from whatever investments are there. So operation will become independent and efficient.

Q: You said that your order book is Rs 4,000 crore, are you seeing it in an improved state as compared to what it was 12 months ago?

A: The major sectors we are focusing on are water, irrigation and power. We have a lot of schemes in Andhra irrigation project. Our main business is water and power.

Q: I believe that you have about Rs 75-100 crore of cash on your books. As an entire group, you have about Rs 700 crore balance sheet in terms of cash--anything attractive in the inorganic space in terms of the US market, Europe or Southeast Asia, any interesting acquisitions you are scouting?

A: I do not think there is anything right now. What we are always looking forward for certainly is a good opportunity.