To use proceeds from stake sale for expansion: Himadri Chem

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To use proceeds from stake sale for expansion: Himadri Chem

Bain Capital has acquired 16% stake in Himadri Chemicals & Industries for Rs 252 crore and is also making an open offer for 20% at Rs 400 per share. In an exclusive interview with CNBC-TV18, Anurag Choudhary, Chief Executive Officer, Himadri Chemicals & Industries gives more details.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Bain Capital to make open offer in Himadri Chem ALSO READ See latest News about Himadri Chem See previous management interviews See what other Experts & Brokerages are saying about Himadri Chem Himadri Chem BSE | NSE 31/05/12 Are Mutual Funds betting on Himadri Chem?

Bain Capital has acquired 16% stake in Himadri Chemicals & Industries for Rs 252 crore and is also making an open offer for 20% at Rs 400 per share. In an exclusive interview with CNBC-TV18, Anurag Choudhary, Chief Executive Officer, Himadri Chemicals & Industries gives more details.

Here is a verbatim transcript of the exclusive interview with Anurag Choudhary on CNBC-TV18. Also watch the accompanying video.

Q: What will you use the money, which has been pumped in by Bain Capital for?

A: This is going for our on-going expansion. We are going to increase our capacity of our existing coal tar distillation plant from 250,000 metric tonne to 400,000 metric tonne. In addition to that we are increasing our carbon black manufacturing capacity. We are also expanding advance carbon material capacity, we are going to expand our SNF business capacity and we are also going to set up a Greenfield project in China. So the total capital outlay for all this has been projected at USD 175 million.

Q: You have already got this PE infusion, aside from this will you need to raise any capital in order to fund all your expansion plans?

A: No. We have already raised this PE capital. Other than this we have tied up loans and internal accruals will be sufficient to meet the capital requirement.

Q: What exactly will be the impact in terms of your revenues and profits once the capacity is on-stream?

A: If you look back, we were basically a company focused into coal tar pitch business. Now, the business has totally changed; we have integrated in several verticals and then lot of forward integrations. Today, Himadri is catering to aluminium industry by way of coal tar pitch, we are manufacturing advance carbon material, which goes to sunrise industry like lithium ion batteries. We have been able to generate power from the waste gas, which is clean and green power. We have SNF business, which goes into ready-mix concrete that goes into infrastructure. Other than that we have carbon black, which goes into automobile.

So if you look at Himadri, we are serving the core sectors of the Indian economy. So that is a big change in the business outlook. So what change is going to take place is that it is not a commodity fine chemical or specialty chemical company. Himadri now is going to take a big change into a carbon corporation.