You are here: Home » Companies » News
Business Standard

VA Tech to raise Rs 475 cr via IPO

BS Reporter  |  Chennai 

Chennai-based VA Tech Wabag Ltd, a water management company, plans to raise around Rs 475 crore through its initial public offering (IPO). The price band for the issue has been fixed atRs 1,230 to Rs 1,310 per equity share of Rs 5 each, aggregating Rs 125 crore.

Speaking to reporters here on Wednesday, Rajiv Mittal, VA Tech’s managing director, said that of the total proceeds, Rs125 crore would be used to set up an integrated IT system and Enterprise Resource Planning (ERP) system to connect its Chennai corporate office with 18 countries to monitor ongoing projects.

Currently, the company has order book of Rs 2,800 crore, which will be executed over the next two years. Of this, 40 per cent is from overseas customers, and the company aims to raise this to 50 per cent over the next 2-3 years. Its focus regions would be emerging markets including north Africa, China, West Asia, Central and Eastern Europe.

The company has reported a turnover of Rs 1,250 crore in 2009-10, a CAGR of 40 per cent over the last three years, said Mittal. On the IPO, he said the company was making an offer for sale of 26,53,383 equity shares by India Advantage Fund I, Dynamic India Fund I, Rainbow Fund Trust, GLG Emerging Markets Fund and Passport India Investments (Mauritius) Ltd.

Following the offer for sale, the ICICI Venture Capital's holding will come down to 15 per cent from 25 per cent. ICICI Venture holds stake through its three funds, namely India Advantage Fund I, Dynamic India Fund I, Rainbow Fund Trust in the company.

The company proposes to use Rs 64.50 crore for funding working capital requirement and Rs 34.74 crore for construction of corporate office here.

The company also has Rs 220 crore cash on the balance sheet which would be used for acquisitions. “If we leave out this amount (the Rs 220 crore), our valuation is around Rs 1,000 crore and the company is debt-free,” Mittal said.

VA Tech Wabag offers complete life cycle solutions including conceptualisation, design, engineering, procurement, supply, installation, construction and operations and maintenance (O&M) services.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 23 2010. 00:18 IST