Bajajs to hike stake in Mukand

The Bajajs and their group-owned companies, which hold 35 per cent stake in Mukand, have forked out a plan to hike their stakes in the company, according to the newly appointed chairman, Niraj Bajaj.

"We like to buy group company shares (including Mukand) from time to time from the open markets. We are ready to put in extra funds for the purchase," said Niraj Bajaj.

The Bajajs and group companies such as Bajaj Auto and Jeewan have been gradually hiking the combined stake in Mukand over the past few years.

In the last financial year, the total holding of the promoter group stood at 46.85 per cent, marginally higher than the quarter ending December 31, 2005 of 44.15 per cent, where the group had a share of around 32 per cent.

The joint promoters of Mukand, the Shah family, however, hold about 11.80 per cent in the company as on March 31. Rajesh Shah, co-chairman of Mukand, and Suketu Shah, joint managing director of the company, hold 5.74 per cent each.

Niraj said the Bajaj family did not have any intention of buying the stake held by the Shah family in the company.

On Saturday, Rahul Bajaj, former chairman of Mukand, handed over the reins of the company to cousin Niraj at the company's annual general meeting, making him the new chairman of the company.

During the current fiscal, the company will raise Rs 300 crore for capacity expansion of finished steel from 300,000 tonnes per year to 540,000 tonnes per year by financial year 2008-09. This 80 per cent of capacity enhancement undertaking is aimed at augmenting the company's turnover by March 2009.

"The company is targeting a cost per tonne of around Rs 12,000 after the expansion drive, given the fact that the same greenfield expansion would otherwise cost around Rs 35,000-40,000 per tonne," added Bajaj. The company has also firmed up plans for setting up a steel wire manufacturing facility.

During the year, margins of the company fell under pressure on account of constraints in supply and increased price of iron ore.