Kaveri Seed to up capacity

Kaveri Seed Company Limited, a Hyderabad-based seed processing company, is in the process of acquiring 200 acres of farmland in Andhra Pradesh, Gujarat and Rajasthan for R&D activities at an investment of Rs 20 crore.

"We have already identified 100 acres near Hyderabad, and 50 acre each in Ahmedabad and Alwar (Rajasthan) for R&D efforts in the areas of superior breeding programmes and biotechnology tools that will enable us to develop highly effective and differentiated hybrid seeds, micronutrients and bioproducts," Venkata Bhaskar Rao, chairman and managing director of Kaveri Seed, told mediapersons here on Wednesday.

Besides, the company plans to set up climate-controlled godowns in Delhi, Lucknow, Jaipur, Ahmedabad and Aurangabad at a cost of Rs 12 crore and scale up capacity at its existing seed processing plants in Andhra and Karnataka from the 18,000 tonne to 30,000 tonne per year.

Also on the agenda is setting up corncob-drying plants "" one each in Andhra and Karnataka "" to increase the cob-drying capacity from the existing 3,000 tonne to 7,000 tonne at a cost of Rs 4 crore.

To fund its expansion, the company is entering the capital market with an initial public offer (IPO) of 1 million equity shares of Rs 10 each through a 100 per cent book building route.

The company intends to raise Rs 60 crore at the lower end and Rs 68 crore at the higher end. The issue opens on September 6, and closes September 11, 2007.

"Post issue, the promoters' equity share holding in the company would come down to 61 per cent, from the present 85 per cent," Rao said.