Diversified company NSL Group, which recently demerged its seeds, sugars, textiles, power and other businesses into independent verticals, is open to diluting about ten per stake in each vertical.
Also, the company would foray into the value-for-money segment of readymade garments by launching its own brand early next year through exclusive outlets, franchises and store-in-store formats in Andhra Pradesh initially and other states later, according to group chairman N Prabhakar Rao.
Speaking to Business Standard, Rao said the group was expecting Rs 250 crore investment from Blackstone in a month or so. “We are parting with less than ten per cent stake in the seeds vertical to Blackstone,” he said.
The investment was to come sometime ago but got delayed due to the demerger of verticals. Of this, Rs 125 crore would be used for repaying debt and the rest for developing infrastructure for seed processing, research and development, warehousing and keeping a war chest ready for acquisitions, he said.
The turnover from seeds this year is likely to touch Rs 600-650 crore, as compared with Rs 500 crore last year. The company is hopeful of touching Rs 1,000 crore in a year or two. “The growth will come from acquisitions,” said Rao. NSL now has controlling stakes in Pravardhan and Yagini Seeds and has 30 per cent market share in Bt cotton seeds.
“The company reorganised its group activities to unlock their value. Each vertical would go for an IPO in phases,” he said.
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NSL, which created cotton-to-garment facilities over four years with an investment of Rs 1,100 crore, commenced manufacturing recently. It has a capacity to handle 2,50,000 spindles, process 1,25,000 metre per day and make 10,000 garments. The operations would stabilise in three months. “We are talking to retail brands for supplying finished garments to them,” Rao said.
The group is hopeful of Rs 1,000 crore revenues from the textile vertical this year and Rs 2,000 crore the next year with 40 to 50 per cent of it coming from exports. It is employing 10,000 people now at its units in Prakasam, Guntur and Krishna districts apart from one contract production unit at Medak. It would employ another 5,000 after expansion.
In the renewable energy segment, NSL would add about 650 Mw in four years to take the installed capacity from the present 115 Mw (wind and biomass) to about 750 Mw at a projected investment of Rs 4,000 crore.
“The energy vertical is tying with a private equity fund for Rs 200 crore capital infusion in two months,” he said. It would raise another Rs 400 crore through an IPO, which it plans early next year. Internal accruals to the tune of Rs 200-300 crore would also be pumped into it.
In the sugar vertical, the group recently developed Krishnaveni Sugars, a greenfield project with a 4,000-tonne per day crushing capacity and a 28 Mw co-generation facility at Mahabubnagar with an investment of Rs 700 crore.
The plant would commence operations this August and about 10,000 tonne sugarcane would be available for crushing in November. It is targeting to tie up with farmers for 30,000 tonne sugarcane next year.
The company also modernised another plant near Bellary in Karnataka with a 2,000 tonne crushing capacity. Another 2,000 tonne capacity would be added in the next phase.