Opto Circuits plans to invest Rs 150 cr in Hassan SEZ

Opto Circuits India Ltd (OCIL), the Bangalore-based maker of medical diagnostics and interventional products, is planning to develop a single-product special economic zone (SEZ) at Hassan at an investment of close to Rs 150 crore.

The company has already acquired 250 acres at the industrial growth centre in Hassan from Karnataka Industrial Area Development Board (KIADB) at a cost of Rs 40 crore. The company intends to set up a greenfield manufacturing facility to produce new range of products. An investment of Rs 50 crore each is required on the construction of the new plant and machinery, Jayesh Patel, director, OCIL said.

“We had earlier planned our SEZ at Mysore, but due to delay in allocation of land we shifted our plan to Hassan. The land is in our possession now. We are waiting for clear guidelines on SEZs by the Central government. The incentives on export oriented units offered by the government expires in March 2010 and the government is currently reviewing the possibility of further extension of incentives. If that does not happen, then we will go ahead with our SEZ plan immediately,” he said.

He said the company intends to move all its new product manufacturing to the SEZ if the EOU incentives are discontinued. The company is coming out with a host of new products for domestic and export markets in both invasive and non-invasive product categories. Around 4-5 products are in different stages of approval from regulators in overseas markets, he said.

Patel said Opto Circuits has readied three new products in the non-invasive product segment and two products in the invasive product segment for launch in the regulated markets. “We are currently waiting for the approval from regulators and hope to launch them in the next 8-12 weeks,” he said.

Opto Circuits is also awaiting approval from the Drugs Controller General of India (DCGI) for approval for some products for launch in India. It plans to launch some new products in the last quarter of this year, he added.

To fund its expansion and SEZ plan, Opto Circuits is raising funds up to Rs 400 crore by issuing equity shares or any other securities which are convertible into or exchangeable with the equity shares in one or more foreign currency under Qualified Institutional Placement (QIP) basis. It also plans to use the funds to retire its existing high cost debt. The company’s board of directors recently took a decision in this regard.

“Currently we have a debt of Rs 300 crore. We had borrowed Rs 200 crore at an interest rate of 12 per cent from State Bank of India last year to part fund acquisition of US-based Criticare. We will now use the fresh funds to retire this debt. The remaining portion of the funds will be used for our future expansions,” a company official said.