Sintex to set up Rs 240 cr units in Delhi, Kolkata

The Mehsana-based water storage tank maker Sintex Industries Ltd will invest over Rs 240 crore to set up prefabrication houses and utility blocks in Ghaziabad near Delhi and Ulub near Kolkata.

The company will raise Rs 210 crore by placing equity with Warbarg Pincus, a private equity fund, and the balance will be met through internal accruals.

Sintex holds a 60 per cent share in the domestic water storage tank market.

The board of directors of the company on Thursday approved the preferential allotment of 30 lakh equity shares at Rs 280.10 per share and 29 lakh warrants convertible into 29 lakh equity shares at Rs 280.10 per warrant.

"Besides setting up units in Delhi and Kolkata, the company is looking at acquisitions. We are planning one such acquisition in Gujarat for water and fuel storage tanks," said Amit Patel, managing director, Sintex Industries.

The company will also issue warrants to the promoters of the company BVM Finance, Opel Securities and Kolon Investment.

The company, which had reported a turnover of around Rs 500 crore in the last financial year, eyes a growth of over 35 per cent in its topline and expects to maintain its projected earnings per share of 35.6.

The company is expanding its applications in the industrial segment with the introduction of some variants used for storage of petroleum products, waste water among others, to capitalise on the growth in the petroleum and energy sectors.

The company has established its presence in the industrial segment with nearly an 80 per cent market share. It has recently tied up with a US-based company to acquire licensing and technology knowhow from the latter to manufacture fiberglass reinforced underground storage tanks for petroleum products, water products, waste water products, among others required in industries.

The business line of storage tanks already contributes over 70 per cent to the company's annual topline of Rs 500 crore. Sintex has hiked its production capacity, consequent to the expansion programme.