Jyoti eyes turnaround through bigger projects

Vadodara-based firm Jyoti, which was on the brink of closure for over a decade, is poised to script a turnaround story by targeting large-scale projects.

The company is currently pursuing a Rs 500-crore project in addition to Rs 755 crore projects on hand. Besides, Jyoti is also set to hit the capital in six months time to raise Rs 50 crore to fund the execution of upcoming large-scale projects.

The company was established in 1943 to manufacture pumps, hydel systems, rotating electrical machines and other major components related to irrigation systems. However, for several years now, the company was in the red.

Rahul Amin, chairman and managing director, Jyoti said, "In addition to the existing order, we are aggressively pursuing a contract order worth Rs 500."

The company already has a Rs 500-crore book order in its kitty and has recently bagged a Rs 255-crore order to supply large size pumps for Godavari Lift Irrigation Scheme of the Andhra Pradesh government.

"We will raise Rs 50 crore from the capital market through public issue or preference shares or by private placement," said Amin.

He further said that the company will raise funds from the captial market within six months to execute the upcoming orders.

"We are in talks with four major construction companies for orders, the negotiation for which is in advanced stages. It will materialise in six months," he added.

Recently, Hindustan Construction Company (HCC) and Prudential ICICI Asset Management Company had taken 10 per cent and 5 per cent stake in Jyoti respectively.

Commenting on the stake acquisition by HCC, he said, "It is more of a strategic alliance with HCC, as we will be a reliable vendor of HCC."

Amin added that the company will have more of such stragetic alliances with the leading construction companies, giving access to Jyoti to the major irrigation related construction contracts.

He said that there are few selective companies in pipeline that have shown keen interest to acquire stake in Jyoti. However, he declined to disclose the name of those companies at this point of time.

"We are at a crucial turning point, where we are looking at big projects that can further improve our financial health," said Amin.

The company has turnover of Rs 115 crore and net profit of Rs 17.5 crore for FY 2005-06.