Ramkrishna Forgings mulls castings plant in state

Auto parts maker and forgings manufacturer Ramkrishna Forgings Ltd (RFL), which caters to the automobile, railway, defence and mining sectors, is drawing up plans to establish a castings unit for automobile components at Bidadi in Karnataka for an investment of Rs 150-200 crore, according to industry sources.

The Kolkata-based company presently has access to Rs 60 crore of short-term debt and Rs 69 crore of non-fund-based bank facilities. “RFL has been looking for land and other local permits necessary to start production at the new unit. Adding capacity out of southern India will help the company address the South Asian market more effectively,” sources said.

RFL managing director Naresh Jalan did not respond to an emailed questionnaire seeking comments on the company’s capacity expansion plans.

The company has in recent times raised Rs 22 crore via private placement of shares to primarily increase capacity in its forging and die-making operations. The capacity upgrade is in keeping with the rebound in market demand from the medium and heavy commercial vehicle segments. The company was also said to be looking at raising a further equity of Rs 32 crore depending on favourable capital market conditions.

Founder group company, Basuki Portfolio Pvt Ltd, and Indian promoters presently hold 44.58 per cent stake in RKFL. Mutual funds hold 30.31 per cent, public corporates own 11.35 per cent, while 11.85 per cent vests with the public.

RFL operates its plants in Jamshedpur and near Kolkata. These are ISO-9002 approved units accredited by BVQI since August 2000 for manufacture and supply of open and closed plain carbon and low alloy steel forgings in the forged, heat treated and machined condition for the Railways, automobile and general engineering segments.

The company is on the approved panel of the Railways for the manufacture of screw couplings, draw gear assembly, snubber assembly, hangers and various other forgings and components for railway coaches and wagons. It is also in the approved panel of Hindustan Motors Ltd., Telco Ltd., BEML Ltd. and many other engineering units.

RFL posted profit after tax of Rs 3.8 crore in quarter-ending December 31, 2009 against a net loss of Rs 2.05 crore in the corresponding period of the previous fiscal. Fiscal 2009 revenues were at Rs 233 crore.