Nu Tek eyes inorganic growth opportunities in Africa

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Nu Tek eyes inorganic growth opportunities in Africa

Nu Tek India recently closed its GDR and raised about USD 44 million. In an interview with CNBC-TV18, Vineet Sirpaul, MD, Nu Tek India spoke on the company's game plan for 2011 and beyond.

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Nu Tek India recently closed its GDR and raised about USD 44 million. The company is looking at utilising the funds to expand its overseas subsidiaries and investing in defence and power. The promoter stake in the company has declined from 20% to 10%.

In an interview with CNBC-TV18, Vineet Sirpaul, MD, Nu Tek India spoke on the company's game plan for 2011 and beyond.

Below is a verbatim transcript. Also watch the accompanying video.

Q: Could you tell us what these funds would be used for and you are looking to get into various sectors. Could you give us a game plan?

A: The GDR that has been raised majorly the fund would be used to start with the overseas expansions like we are looking at actively on acquisitions of same space companies in Africa and the Middle East. In fact we have already setup a data centre in Africa at a capital investment of about Rs 12 million.

Apart from that we are looking at neutral host services for in-building services in India. We strongly believe that the in-building space is something which has a good potential going forward. So that is one space we are looking at.

Of course the power sector is another thing which is very hot at this moment. We have been looking at the non-conventional power projects like solar projects and the hydel projects. We have identified a couple of them and looking at the due diligence process as to going in our already running power projects.

Q: How much are you looking at investing particularly in the power space and when do you think these projects could come on stream?

A: We will not start directly on a very bigger note. We will start with small 3-5 mw projects. We will get a feel of it, and then going after strongly on this sector. But majorly the investment, as I said, right now the focus is on the overseas market as well because that is where in the telecom space, that is where the moolah is.

Q: Where does the promoter holding now stand at in the company?

A: The promoter holding is at 10%.

Q: Are you not apprehensive that the promoter holding has come down so substantially. There could be a hostile move by players trying to takeover?

A: At this moment the promoters are professional managers. They are not from the old school of thoughts wherein the thing that promoter holding should be greater than 30% odd.

Q: Are you taking any steps to shore up your holding?

A: As such there is going to be a small warrant issue that is already on the cards. But at this point in time we believe the net worth of the company has improved and even a smaller holding is sizeable for the promoter as of now. The company is being run by a professional team. In fact looking at the telecom, power, all those spaces put together.

Q: But it's a bit difficult to understand. You were at 44%. I understand it's a professionally run management, but 44% down to 10%. Does it not raise a bit of alarm bells, for your expansion plans?

A: We have to be fully funded in order to expand.

Q: Was debt not an easier option, overseas debt is now available at attractive rates?

A: Once we are fully funded then we can also look at debt as an option. Initially when we were looking at debt, we got very few takers to offer us that. Now at this stage when the net worth is very high and we are looking at extensive capital intensive projects, now we will use a judicial mix of equity and debt to go forward.