Salzer plans to raise Rs 150 crore

Coimbatore-based manufacturer of electrical installation products Salzer Electronics Ltd (SEL) said it would require Rs 100-150 crore in the next two years to achieve a turnover of Rs 500 crore.

“To reach our target, the company would require another Rs 100-150 crore, which we are thinking of raising through private equity or debt. The PE fund will be based on the big projects, which we have bid for,” said Rajesh Doraiswamy, joint managing director, SEL.

The company registered a turnover of Rs 120 crore during the year ended March 31, 2009, as against Rs 73 crore in the previous year. It expects to close the current fiscal with a turnover of Rs 170 crore and had set a target of Rs 500 crore by 2011-12.

Doraiswamy said they were betting big on the Rs 50 crore project from the Bangalore administration that involves installation of SEL’s energy saving and energy management equipment. The company is hoping to bag orders from Chennai and other public utilities.

It had also bagged an order from the Coimbatore Corporation. SEL will invest Rs 7.5 crore in the project to be implemented on a build, operate and transfer (BOT) basis. “One of the aspects of this project, apart from saving energy, is carbon emission reduction, which will be 7,000 tonnes a year,” he said.

The company’s research and development (R&D) division has also developed a new product -- Automated Meter Reading, which will collect the data and send it to the central system. The data will not only monitor the entire supply chain, it will also generate billing. The new system is currently being piloted in Bhopal and would soon be introduced in other parts of the country.

SEL currently has around 12 products in its basket developed at its R&D centre in Coimbatore. The centre employs 20 people and the company spends spends 4-5 per cent of the turnover on R&D.

Engineering company L&T has a 26 per cent equity in SEL and has been marketing the latter’s products under the brand Salzer.