Voltamp to offload 48% holdings for public

Voltamp Transformers (VTL), a Vadodara based leading manufacturer of transformers in India will offload 48 per cent of their holdings in the company through a public offer for sale. There are two shareholders who are offloading their stake.

The company has already filed an application with SEBI seeking permission to sell part of their stake to public through the book-building route.

The company will offload 48.83 lakh equity share of face value of Rs 10 of which 2,44,192 equity shares is employees reservation portion.

While net offer to the public is 46.39 lakh equity share of which 50 per cent will constitute qualified institutional buyers, 15 per cent will constitute non-institutional buyers and 35 per cent will constitute retail individual bidders.

Talking to media, K S Patel, joint managing director and CEO of VTL said, "The primary purpose of the offer is to get the benefits of listings and divest the holdings of our selling shareholders."

According to the company the listing will enhance its visibility and provide liquidity to the existing shareholders.

Patel said, "We see further enhancement of the transformer business segment due to the rapid growth of the power sector in India."

According to him, the current national grid capacity of 9,500 MW will increase to 30,000 MW by 2012.

The company is also optimistic about development of the national grid project of government of India which will further enhance the demand of the transformer in the country.

"With every 1 MW of generation capacity the country requires 7 MVA of transformer capacity," said Patel.

The company's growth strategy is directed towards strengthen its brand equity, optiminising resoures, exploring new business sectors, focusing on projects, exploring into export market and expand dry type transformers base.

"Alternate markets like USA is available if the local market drys up," said Patel. According to him, the local market demand is increasing in leaps and bounds.

Of the total business share of the company, it has only 4 percent business share with the State Electricity Board (SEB - government agency) and has 100 percent recovery with SEB.

While it has major business share with the power companies from the private sectors.

Voltamp produces customized transformer for its clients.

The company has capacity of 5,400 MVA and capable of manufacturing transformer of 50 MVA, 132 KV power transformer class for vivid applications in different segments of industries.

The company has technical collaboration with MORA Transformatoren GmBH and Usingen Germany.

The company produces oil filled transformer and dry transformers.

Been a major player in producing dry transformers, the company claims to control 45 percent of the dry type transformer market.

The company revenue has grown from Rs 110.35 crore in FY 04 to Rs 174.37 crore in FY 05. The net profit has jumped from Rs 9.97 crore in FY 04 to Rs 14.38 crore in FY 05. During the first three quarters of the FY 06 it has revenue of Rs 175.36 crore and generated net profit of Rs 16.37 crore.