Will raise $5-10m to cover acquisitions: ACE

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Will raise $5-10m to cover acquisitions: ACE

Action Construction Equipments or ACE has reported that it is looking to raise around USD 10 million from private equity players to fund acquisitions that it has planned. According to Sorab Agarwal, managing director of ACE, two acquisitions should be finalized within a month.

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Action Construction Equipments or ACE has reported that it is looking to raise around USD 10 million from private equity players to fund acquisitions that it has planned. According to Sorab Agarwal, managing director of ACE, two acquisitions should be finalized within a month.

Agarwal goes on to say that they are facing slower order inflows due to high interest rates and other policy issues. "Over the last month and a half, builders, construction companies or infra companies and industries which buy from us are searching for slightly better interest rates from finance companies and NBFCs. So that definitely causes some lag" he said to CNBC-TV18 in an exclusive interview.

However, he is positive on the company's outlook, and says that they will deliver EPS of Rs 6-6.5 on an annualized basis.

Below is an edited transcript of his interview with Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: Can you tell us more about your plans to raise about USD 10 million from private equity players. Also, there was talk that you are looking for acquisitions in India and China. Has there been any progress on that front?

A: Yes, we will raise somewhere between USD 5-10 million from private equity or similar funds that can provide us the right valuation to cover up for our acquisitions. The acquisitions are still going on and as a matter of fact, negotiations are on. Hopefully, in the next one month, we should be able to close both of them.

Q: Your last quarter revenues or gross sales went up from Rs 133 crore to Rs 221 crore, so year on year growth was fairly decent. How has it been in the current second quarter?

A: In the current quarter, especially in the month of July, it was on the growth track. But there was a slight lull in August, most probably because the rains got extended. But on the whole, the order booking, the inflow and the momentum is definitely on track. So even the current quarter should be in similar lines to our earlier quarter.

Q: Are you seeing much slower flow of orders from the past few quarters because of high interest rates or other policy issues like land acquisition?

A: As compared to the March quarter, the incoming orders are slightly slower. The bigger problem is the interest rates, because builders, construction companies or infra companies and industries which buy from us are searching for slightly better interest rates from finance companies and NBFCs. So that definitely causes some lag and that has been happening over the last 1-1.5 months.

Q: What is the current order book looking like and what kind of visibility does it lend to you?

A: Depending upon different product categories, we are booked for about 1.5-2.5 months, whether it's a pick and carry crane or tower crane four clips because the scale of order booking levels are different. But it is somewhere between 1.5-2.5 months for different product segments.

Q: You have done about Rs 4.8 as annualized EPS in the last quarter. What do you think you will end the year with, annualized Rs 5 or more?

A: I think it should be definitely more than that; it should be at least about more than Rs 6-6.5 on annualized basis.