Exide Plans Rights Issue In Mid-April
The Rahejas-controlled wet battery major, Exide Industries Ltd (EIL) which has completed the takeover of Standards industrial undertakings will launch its rights issue in mid-April, at a premium of Rs 90 per share.
EIL plans to mobilise Rs 72 crore from it to partly fund the Rs 100-crore acquisition. DSP Merril Lynch is the lead manager of the issue. The company will offer the shareholders one rights share for every four equity shares held.
The company will promote and develop the Standard Furukawa brand and will continue to compete with the Exide range of products, EIL chairman & managing director, S B Ganguly said yesterday.
A decision was taken after Ganguly got the approval of Japanese technical collaborators Shin Kobe and Furukawa.
With this, EIL is now bracing up to take on the global competition. It plans to emerge as a major force in the global scene by raising its automotive battery production capacity to 5 million units per annum in the next few years.
The company has targeted a turnover of Rs 600 crore by the end of the current fiscal.
Our vision of reaching a turnover of Rs 1000 crore will materialise before the turn of the century, Ganguly said.
With the chances of the automotive battery market opening up to global competition gaining, the EIL strategy is to pre-empt global competitors foray in the country by garnering a big chunk of the market.
With the acquisition of all fixed assets and brands (including those with Furukawa technology for the Taloja unit) of Standard Batteries, EIL now has 8 factories.
The four industrial undertakings of Standard at Taloja and Kanjur Marg (Maharashtra), Ahmednagar and Guindy have now come under the Exide family, increasing the work force from 3000 to more than 4000 and the dealer network from 1800 to 2400.
EILs automotive battery capacity, following the inclusion of Taloja unit, will increase from the current 2.7 million to 3.3 million per annum.
EIL is planning to expand the capacity of Taloja automotive unit and may shift the industrial battery segment from Taloja and integrate it with any of the other conventional units.
EIL has deferred its Haryana project to 1999-2000 and is focusing on expanding some of the newly-acquired undertakings. The company, however, will utilise the project site to store and channelise supplies to auto majors.
The industrial battery segment has grown between 18-20 per cent during the current fiscal while the company is set to earn around Rs 18 crore from its range of solar batteries. EIL is drawing a strategy to penetrate the replacement market for heavy and light commercial vehicles, currently catered by the unorganised sector, by launching low-priced products. Even a five per cent market of this would necessitate the need for setting up two factories, Ganguly said.