BEML to raise Rs 450 cr via FPO

New Delhi, June 22 (UNI) State-run BEML today entered the capital market with its Follow-On Public Offer (FPO) of 40 lakh equity shares of Rs 10 each for cash to be decided through a 100 per cent book-building process.

The price band will be decided before the issue opening on June 27. The issue closes on July 3.

The issue will constitute 11.77 per cent of the fully diluted post-issue paid-up equity capital of the company and post-issue, the government holding in BEML is expected to remain above 51 per cent.

The company plans to invest about Rs 900 crore for expansion and diversification, out of which, Rs 450 crore will be raised by the issue and the balance will come from internal accruals.

Out of the proceeds, Rs 214.50 crore will be utilised for the expansion of the metro coach manufacturing facility in Bangalore, Rs 180 crore for capital expenditure including upgradation of current facilities, Rs 27 crore for a five-MW wind mill for captive consumption.

Besides, nine crore rupees will be put in for an R&D centre of excellence for metro coaches and Rs 90 crore for voluntary retirement scheme.

The company has also earmarked Rs 100 crore for foray into contract mining and Rs 100 crore for setting up exclusive facilities with Apollo Tyres and JK Tyres.

''We are eyeing to churn out a revenue of Rs 5,000 crore by 2013-14 from Rs 2,600 crore in 2006-07 and expect our business to grow at 25-30 per cent per annum in the next few years,'' said BEML Director (Rail and Metro Business) N K Sreenivasan.

BEML is engaged in mining and construction equipment, defence products and railway and metro products. It has three facilities in Bangalore, Mysore and Kolar Gold Fields.

It recently forayed in the range of high quality hydraulics, heavy duty diesel engines, welding robots and heavy fabrication jobs.

The company also ventured into two new business areas, providing engineering design software solutions and trading for marketing of non-company products, components, aggregates and commodities for domestic and international markets.

In the defence equipment segment, BEML has a presence in all ground support equipment except aircraft and electronics and contributes 30-35 per cent of turnover. In 2006-07, this segment had a turnover of Rs 743 crore and is likely to cross Rs 1,000 crore. I For 2005-06, BEML reported sales of Rs 2,060 crore and for the nine months ended December 2006, sales were at Rs 1,486 crore.

UNI