Daspalla sells wire rope unit to Poddar Group

Visakhapatnam-based Daspalla Group has sold away its wire rope manufacturing unit, Visakha Wire Ropes, to Jharkhand-based Poddar Group for Rs 5 crore.

"Keeping in view the heavy fluctuations in steel trading and the promoters' lack of knowledge about the business, we decided to sell off the unit," M Raghavendra Rao, managing director, Daspalla Group, told Business Standard. Daspalla Group officially handed over the unit to Poddar Group in September.

Daspalla Group had taken over Visakha Wire Ropes unit from a private entrepreneur in 1997 at a cost of Rs 2 crore. Later, they invested about Rs 5 crore to expand the capacity from 1,000 tonnes annually to 9,000 tonnes. During last fiscal, the unit clocked a turnover of about Rs 30 crore and posted profits of Rs 75 lakh.

According to Rao, the hotel business being the group's forte, Rs 1 crore is being spent on modernisation of Vizag Daspalla Hotel.

"We are creating five-star facilities in 24 of the total 126 rooms in the hotel. The rooms are being equipped with imported electronic key and electronic safe system," he said.

During the first half of the current fiscal, the hotel registered a turnover of Rs 5.5 crore. The resorts and restaurants of the group reported a turnover of Rs 5.6 crore during the same period.

On the progress of the three-star hotel planned at an investment of Rs 16 crore in Hyderabad, Rao said the construction work would begin before December and it would be completed within 18 months. Of the total investment, the promoters would chip in with Rs 5 crore while the remaining would be borrowed from financial institutions.