Air-conditioner generator maker TD Power Systems plan to raise around Rs 227 crore. Around 87 lakh shares are on offer and the price band is between Rs 256-261. The issue opens today and closes by the end of the week.
In an interview to CNBC-TV18, TD Power Systems' joint managing director, Nikhil Kumar said that the company would use this money to reduce their debt and in constructing a new factory and project office in Bangalore. He explained, "TD Power will be a debt free company after retiring the long-term debt of Rs 30 crore on books." Here is the edited transcript of the interview. Also watch the accompanying video. Q: Where do you fit in the power equipment space?
A: We have two business segments. Our first business segment consists of manufacturing electric generators from 1 megawatt (MW) to 52 MW. We manufacture generators for all the verticals of the power industry.
We make machines for steam turbines, gas turbines, hydro turbines, wind turbines and the diesel engine space. We make generators for gas engine, diesel engines and heavy fuel operator engines.
For our second business, we do power projects and EPC for the turbine generator island up to 50 MW. We also do the boiler turbine generator island up to 150 MW. Q: What is the purpose of raising Rs 227 crore? How do you plan to spend it?
A: Primarily, we will spend our money in a new factory in Bangalore. Then, we wish to reduce Rs 30 crore of debt on our books. We would also construct a projects office for our EPC group in Bangalore. Q: How much debt do you have on books? What is the plan post Rs 30 crore of reduction? What would it look like?
A: It would be a debt free company after retiring the long-term debt. Q: You have a diverse customer base, but you work on a lot of repetition of orders. Could you take us through that?
A: The representation of customer base looks very repetitive because we sell our machines to turbine makers, who in turn sell them to the end users. Our sale representation would be the turbine maker, which would then be repetitive.
Our end user profile is diversified. We have a little or no repetitive business on a year-on-year basis. We would also have a loyal customer base inside and outside India. For example, if the blue chip companies have five captive power plants, they would use our machine for all their plants. Q: Do you supply only to captive power generators? Do you supply any kind of equipment to the big power companies like Lanco, GMR and GVK? Who are your typical clients?
A: We are in the industrial sectors like steel, sugar, cement plants, and process industry like food, fertilizer, chemical and paper have a capacity of up to 150 MW. Industrial complexes also use our machines for captive power generation which would be around 30-40 MW that would power the entire complex. Q: This time capex plans have been withdrawn or haven
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