To expand spinning capacity at an investment of Rs 234 cr
One of the largest manufacturers of the fully drawn yarn, Nakoda Limited has announced an investment of Rs 1,500 crore for expansion of various capacities during the next three years. To begin with, the Surat-based textile company is expanding its spinning capacity from 1,00,000 MTPA to 1,40,000 MTPA immediately.
While the first phase of the spinning capacity expansion is nearing completion at a cost of Rs 333 crore and is expected to go on stream by August, 2010, work on the second phase is set to kick off soon post-announcement. According to Babubhai Jain, chairman and managing director of Nakoda Limited, the company's plan to invest Rs 1,500 crore during the next three years is to expand capacities in Polyester Yarn segment and consolidate its operations by further integration. The three year plan was recently approved by the Board of Directors in its meeting.
For the quarter ended March 31, 2010, Nakoda Limited reported a 23.51 per cent increase in its revenue from Rs 237.17 crore to Rs 292.43 crore during the same period for the last fiscal. The profit after tax for the quarter ended March 31, 2010 stood at Rs 7.40 crore, resulting into an increase of 81 per cent, as against Rs 4.09 crore in the corresponding period of the last fiscal.
Commenting on the results, Jain said, "Once again the company has posted better results indicating continuous improvement in its operational parameters. We look forward to continuous and sustained growth in future."
While, income from the manufacturing segment rose by 26 per cent to Rs 123.28 crore from Rs 97.70 crore for the quarter under consideration, in the trading segment, the sales touched Rs 169.65 crore from Rs 139.47 crore, an increase of 21 per cent.
The Board has also proposed to enhance the capital base of Nakoda Limited by making a preferential issue of convertible warrants of Rs 108 crore to the promoters and strategic investors. Moreover, additional funds not exceeding Rs 108 crore is proposed to be raised by offering equity shares through QIP or depository receipts, the proceeds of which would be deployed to meet the company's growth plans. Nakoda’s spinning capacity will rise to about 0.5 million MTPA once the proposed plan is implemented.
