Welspun Gujarat gets nod to hike FII pie

The Bharuch-based Welspun Gujarat Stahl Rohren Ltd, a manufacturer of welded pipes, has approved the limit of investments by foreign institutional investors (FIIs) in the company from the existing 22 per cent to up to 40 per cent.

The decision was taken at an extra ordinary general meeting of the company, held on January 7.

FIIs already have a 22 per cent stake in the paid-up capital of the company and this limit has now been increased to 40 per cent.

Rules state that FIIs can hold up to 24 per cent of the paid-up capital, but if this has to be increased beyond 24 per cent, permission of the stakeholders is required.

The turnover of the company at the end of the last fiscal year was Rs 397.10 crore.

M L Mittal, chief financial officer of Welspun Gujarat, said while the foreign institutional investors already had a 22 per cent share in the paid-up capital worth Rs 140 crore.

"FIIs will now be in a position to purchase up to 40 per cent of the paid-up capital and we have provided an additional cushion of 18 per cent," he said.

The Welspun group is a Rs 1,500 crore business house with interests in various fields.

The group began operations in the mid eighties, setting up a modest polyester yarn processing unit at Palghar in Maharashtra.

Welspun Gujarat Stahl Rohren Ltd, a joint venture between Welspun and the Gujarat Industrial Investment Corporation, was founded in 1995.

It has an installed capacity of two lakh MTPA and was floated with an initial outlay of $75 Million.

It is one of the leading manufacturers of submerged arc welded pipes in India.

Intertec Gmbh, Germany, provides the technical expertise in this venture.

The company is also into coating of pipes with a joint venture with Eupec pipe coatings Ltd, France.

Welspun India Ltd, the flagship company of the group, was established in 1992.

It has an annual turnover of over Rs 300 crore.

It is the fifth largest manufacturer of terry towels in the world and is also the largest manufacturer of terry towels in Asia.

It is the largest exporter of terry towels to the US and Europe. It is accredited with the Supima registration for terry products and is a certified user of the Egyptian Cotton Logo.

During the current year, WGSRL is executing the Rs 393 crore DVPL pipeline project for Gail and has also bagged orders from Iran, worth $102 million.

The company, during the current fiscal year, is geared to take full advantage of the emerging markets.

In the domestic market, the WGSRL is looking at the huge potential available in pipeline projects like the gas grid of GSPL in Gujarat, Reliance Gas and Gail.