BEML's Rs 450cr FPO to open on Jun 27

Mini-ratna Bharat Earth Movers (BEML) plans to raise around Rs 450 crore through a follow-on public offer (FPO), to part-finance its Rs 900 crore capex programme over a period of three years.

The issue, opening on June 27, would constitute 11.77% of the fully-diluted post-issue equity capital of the company. Post-issue, the government's stake would come down to just a tad more than 51%.

"Our FPO of 49 lakh equity shares of Rs 10 each will remain open for subscription for seven days ending July 3," V R S Natarajan, chairman and managing director, BEML said.

The price band for the issue has not been finalised yet, and will be known at least one day prior to the issue opening, he added.

The investment, he said, was needed to fuel the company's growth plan, and would also help it to achieve the revenue target by 2010-11 or latest by 2011-12.

The company has set a revenue target of Rs 5,000 crore by 2013-14. Its revenue last fiscal was Rs 2,600 crore.

Natarajan said BEML would invest Rs 304.5 crore of the issue proceeds for expansion and upgradation of its metro coach manufacturing plant in Bangalore, besides setting up a 5MW wind mill for captive consumption for Rs 27 crore.

The company also plans to invest Rs 9 crore towards development of a R&D centre of excellence for metro coaches, and a voluntary retirement scheme.