Time Technoplast acquires Hyd firm for Rs 50.3cr

Company to buy 4.289 million shares of NED Energy.

Technology-based polymer products company, Time Technoplast Limited (TTL), has acquired 74 per cent equity in Hyderabad-based NED Energy Limited at a total investment of Rs 50.3 crore.

The Mumbai-based company has entered into an agreement with NED, a closely-held company engaged in the manufacture of valve regulated lead acid (VRLA) batteries, to purchase 4.289 million shares (71.48 per cent) of the existing share capital from the latter's promoters at a price of Rs 103.33 per share aggregating Rs 44.31 crore, besides subscribing to 0.58 million additional shares at Rs 103.33 per share at an aggregate value of Rs 6 crore.

The existing promoters will continue to hold 26 per cent of the equity capital of NED. The company, enterprise value of which is estimated at Rs 65 crore, registered a turnover of Rs 4.5 crore with a net profit of Rs 3.3 crore during FY07. It expects to garner Rs 60 crore revenues with a net profit of Rs 5.5 crore during FY08.

NED, which mainly caters to the telecom sector, has designed and developed batteries for the automotive vehicles. In addition, it has developed and is ready to commercialise VRLA batteries for electric and hybrid electric vehicles.

"The synergy with NED will help us grow in the automotive components segment, where we have a significant presence," Anil Jain, managing director of TTL, told mediapersons here on Monday.

NED Energy currently has a 100-million ampere hour capacity at its Hyderabad facility. It proposes to triple this to 300 million ampere hours at an outlay of Rs 30 crore, which will be funded by the present infusion of equity by TTL (Rs 6 crore) and the rest by way of internal accruals and additional borrowings.

"We have already acquired five acres of land in Gujarat for setting up a battery plant and work on the facility is under way. The facility, from where our first automotive battery will be rolled out, is expected to go on stream from the second quarter of FY09," he said.

The domestic automotive battery market, according to him, is pegged at Rs 1,600 crore while the telecom battery market is estimated to be Rs 985 crore, in which NED has a five per cent market share.

The telecom sector is growing at a rate of 40 per cent and the demand for telecom towers is expected to touch 3.3 lakh by 2010, from the present 1 lakh. TTL hopes quite a few of them coming in from the NED stable, Jain added.

TTL, which posted a net profit of Rs 41.4 crore on a turnover of Rs 456.9 crore in FY07, expects its net profit to touch Rs 75 crore and its revenues to exceed Rs 700 crore during FY08.