Vijay Tanks to go public for expansion

Vadodara-based Vijay Tanks and Vessels (VTV) is going public next year to support its future expansion plans following unprecedented growth in demand for its products from petroleum industries both at domestic and international market.

Talking to Business Standard Anand Raghavan, managing director of VTV, said, "The Indian oil & gas refineries capacity is expected to increase by 50 per cent over next six years, creating a huge surge in the demand for oil & gas storage systems and other fabricated engineering products."

In the last fiscal, the company registered a total turnover of Rs 150 crore.

The company generated 75 per cent of its total turnover amounting to Rs 112.5 crore from its core business of supplying products to oil & gas, petrochemical and fertiliser industry.

This apart, the company also also supplies to water and steel companies.

Raghavan said, "We expect our turnover to jump by 25 per cent next year due to the boom in the petroleum sector".

He said company has set a target of Rs 180 crore for 2006-07.

"We will scale up the capacity by upgrading our technology, raise more fund and pursue strategic business opportunities," he informed.

Emphasising the need to tap the opportunity, he said, "There is need to garner more fund for the rapid growth of VTV and raising fund from public is more viable for a long run and an attractive option."

Therefore, we are looking forward to go public in 2007, he added.

According to the company, in 1996, the Indian oil and gas refinery capacity was 60 mmt which had doubled 120 mmt by 2003 and is expected to grow to around 180-200 mmt by 2010

Further he said the company will look at other given option too like debt or internal accrual.

"We are also thinking to have a mixture of debt and equity", Raghavan added. However he said, "Funds raised through debt will incur immediate cost to the company."

V Sunderrajan, director of VTV, said, "The unprecedented growth in the oil refineries of India has created a vast gap between the demand and supply of storage tanks, vessels and fabrication work".

The supply of storage tanks, vessels etc are less than 50 per cent and this makes fabrication business a sellers market, he added.

"We expect the fabrication business in India to increase by 30 -40 per cent at compounding rate in the coming years", Sunderrajan said.

Vijay Tanks is a key player in the turnkey design, engineering, procurement, construction, commissioning of atmospheric storage tanks, cryogenic storage tanks, high-pressure spheres, vessels, and internal plant piping for the refinery, petrochemical, fertiliser and steel industries.

It is also known as 'fabrication businesses', as the steel are converted into specified vessels as per the requirement of the project.