Nu Tek's GDR issue to see equity dilution of 10%

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Nu Tek's GDR issue to see equity dilution of 10%

Inder Sharma, CMD, Nu Tek India, in an interview on CNBC-TV18 spoke about the latest happenings in his company. Below is a verbatim transcript of his interview with CNBC-TV18’s Latha Venkatesh and Gautam Broker. Also watch the accompanying video for more.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Nu Tek India See previous management interviews See what other Experts & Brokerages are saying about Nu Tek India

Inder Sharma, CMD, Nu Tek India , in an interview on CNBC-TV18 spoke about the latest happenings in his company.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video for more.

Q: Since you are diluting your equity, what will the proceeds be used for?

A: There are a couple of reasons. We are funding our overseas subsidiaries where we are seeing a lot of good business opportunities come in as was evident from the last quarter.

Our results saw almost 50% of our bottomline coming from there. The opportunities are really very attractive and are looking up. We are going to fund our subsidiaries there. We are aggressively getting into neutral host ownership business in building solution business which will be a good capex.

Q: What is the current dilution on account of this GDR?

A: There will be a dilution of 10% in this case.

Q: Your promoter holding is steadily declining from 44% to 20% and now you're diluting even further. What is the rationale behind this dilution of promoter share?

A: One of the reasons is we are going to retire our domestic debt which is costing us quite a bit on our bottomline plus at the same time I'm being a promoter subscribing into warrants so I'm going to shore up my ownership well above 26% in the next few months.

Q: Can you tell us more about the power business that you are foraying into and what will the visibility be in terms of when the revenues flow in?

A: The power sector is definitely attractive. We are bullish on it. We already have at least two projects lined up. We are just tying the backend which will require capex spending which is one of the reason we are raising more funds.

Q: What are you expecting to do in revenues in FY11?

A: The visibility on the topline and the bottomline will be coming in only after a couple years because there is a registration period involved. As far as cash flows and visibility goes, post 2013, it will definitely help our bottomline significantly.

Q: How is your European arm's business doing right now?

A: We have already started work in full swing in Central America which is bearing good fruit and visibility is looking excellent and we are investing further there. Africa is looking good as well. We have at least two customers there.

As far as our European subsidiaries go, they have not gone as per plan. We are winding it down. We had an opportunity on the anvil but it did not materialize. We are now going to close down our European subsidiaries.