Sujana Towers eyes topline of Rs 5000cr in next four years

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Sujana Towers eyes topline of Rs 5000cr in next four years

Sujana Towers is targeting a topline of Rs 5,000 crore and a bottomline of Rs 500 crore in the next four years. For this, the company is planning to raising about Rs 1,500 crore by way of debt and equity in the time span of in the next 18-24 months.

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Sujana Towers is targeting a topline of Rs 5,000 crore and a bottomline of Rs 500 crore in the next four years. For this, the company is planning to raising about Rs 1,500 crore by way of debt and equity in the time span of in the next 18-24 months.

Citing their expansion plans, Kamesh Yalamarty, managing director, Sujana Towers said, "We are going to setup a new facility in Guwahati. We are also contemplating to increase our cable manufacturing capacity to 2,400 kb. We are anticipating about 200% capacity increase in the existing lines of business."

Below is the edited transcript of Yalamarty's interview with Ekta Batra and Reema Tendulkar of CNBC-TV18. Also watch the accompanying video.

Q: Can you just take us through where exactly the fund raising plan stand? How much are you looking to raise and what would be the instruments?

A: We are now looking for a very blistering growth pace. Sujana has set itself in the next four years to achieve a top line of Rs 5,000 crore and a bottom line of Rs 500 crore. Our business plan has also been weighted by CRISIL and they have endorsed the line of thinking what we are talking. We are looking at about 400% increase in the top line in the next four years and about 500-600% bottom line in the next four years.

This calls for huge outlay on our fixed assets and our facilities and it requires a blistering pace of growth. For this purpose tentatively, we are looking of raising about Rs 1,500 crore by way of debt and equity. Out of which about USD 100 million we would be raising either through ECB or FCCB way. Domestically, we are planning to raise about Rs 400 crore through non-convertible debentures.

The said fund raising will take place in the next 18-24 months of time. It would be a mixture of the debt and equity. With this, our fund raising plans will reach a plateau to achieve Rs 5,000 crore. That should be able to keep a company firing on all the four cylinders to achieve the rated plans.

Q: How much debt do you already have on your books? How difficult is it to venture into the markets considering that we are working with such difficult situations right now? Have you already spoken to investors and banks?

A: We did. Interestingly, we are a very lowly debt company. I don't carry a major debt of more than Rs 100 crore plus on the books and we have lot of leverage available. Other than the working capital borrowings which are required for the day-to-day operations my debt profile is very low. Taking into consideration the fixed assets we have on the hand raising debt is not a matter of concern.

Given the current market situations, I am sure that the power transmission sector is going to be very bullish in the next five- six years and so will be the emerging telecom sector. We are seeing lot of demand coming up in the telecom sector because the uncertainties over and 3G, 4G plans are in way. So I don't think raising debt or any equity licked instrument is going to be a difficult task.

On the other hand given the market situation, I am sure investors will consider the emerging sectors like power transmission and so is Sujana Towers. I am not concerned about this. At the same time it's my personal opinion that our script is not fully valued. There is lot of potential in our script.

Q: Do you have any capacity expansion plans? If you fund raising is maybe in the next 12 to 18 months what capacity expansion take place after you have raised all this money that you are referring to?

A: We are going to increase our capacity by almost 100% as far as the towers and cable manufacturing is concerned. We are going to setup a new facility in Guwahati. It will have 100,000 tonne plus which will take about Rs 300 crore. We are sitting on one of the worlds top tower testing station to test up to 1,200 kb which is the worlds highest voltage rating.

In order to achieve about 400% top line increase, we have to grow in the same growth. Apart from the new lance of business we are anticipating about 200% capacity increase in the existing lines of business. We are also contemplating to increase our cable manufacturing capacity to 2,400 kb. But those plans are still on the drawing board. These all will bring lot of value to the company as a super market in the transmission sector.