Welspun to raise Rs 200 cr via ECBs

Welspun Gujarat Stahl Rohren, the Indo-German joint venture promoted by the Rs 2,000 crore Welspun group, is planning to raise around Rs 200 crore from the international markets through the external commercial borrowings (ECBs) route. The company is raising these funds for its greenfield expansion project at its Anjar plant in Gujarat.

Welspun Gujarat has lined up Rs 259 crore for the expansion. The expansion plan includes setting up of a 2 lakh tonne per annum longitudinal seam submerged arc welded pipe plant, a 40,000 tonne per annum spiral pipe plant, a 2 lakh tonne per annum high frequency induction weld pipe plant and a three layer polyethylene coating plant

B K Goenka, vice chairman and managing director, Welspun Gujarat, said, "While around Rs 50 crore will be generated through internal accruals, the balance funds will be raised from foreign lenders."

Although we have not yet finalised the method of raising these funds, we could opt for the ECB route."

The proposed expansion will be commissioned by December 2004. "After the expansion, we expect the company's turnover to be around Rs 1,800 crore, in the next financial year."

Welspun Gujarat registered a total income (net of excise) at Rs 836 crore for the year ended March 31, 2004, against a turnover of Rs 386.19 crore in the previous year. The company posted a net profit of Rs 72.31 crore for the year, compared with Rs 1.54 crore in the previous year.

Meanwhile, in the fourth quarter ended March 31, 2004, the company posted a net profit of Rs 12.7 crore, compared with a net profit of Rs 8.23 crore in the corresponding quarter of the previous year.

Welspun's total income (net of excise) in the quarter stood at Rs 143.55 crore, against Rs 92.75 crore in the corresponding period of the previous year.