Surana Telecom and Power Limited, a city-based manufacturer of optical fibre, ethernet converters (modems), power cables and aluminium rods, will dilute 20 per cent of the equity in its solar power subsidiary – Surana Ventures Limited (SVL) – to foreign institutional investors (FIIs). The capital raised will be utilised to fuel SVL's expansion plans.
Surana Telecom, on October 14, received in-principle approval from its board to demerge the solar business and consolidate it with group company Surana Ventures. At present, Surana Telecom and its publicly-listed group company Bhagyanagar India Limited hold 49 per cent each in Surana Ventures, while the rest is with the promoters.
“The process of stake sale to the FIIs will be completed within six months when Surana Ventures shares are expected to be listed on the BSE and NSE,” Narender Surana, managing director of Surana Telecom, told Business Standard.
Surana said the company had obtained a licence from the Non-conventional Energy Development Corporation of Andhra Pradesh (Nedcap) for setting up a 5Mw solar power plant in Hyderabad at a cost of Rs 63 crore. The company was on the verge of signing a power purchase agreement with the Southern Power Distribution Company of Andhra Pradesh in a month. The project will be synchronised with the grid within one year, he added.
“We are planning similar projects in Gujarat, Rajasthan and Tamil Nadu, which will go on stream during the next financial year. Considering the higher price for solar power in Europe, which is Rs 25 per unit as against Rs 12 in India, we are talking to engineering, procurement and construction (EPC) contractors for setting up a 5Mw solar power plant in that geography. Each of these projects will entail an investment of over Rs 60 crore, which will be funded through debt and internal accruals in the ratio of 70:30,” Surana said.
Surana Ventures, which currently has a 60Mw capacity to manufacture solar cells and modules in Hyderabad, is in the process of setting up a 20Mw solar photovoltaic module manufacturing plant at the Fab City on the city outskirts. Coming up on 25 acre, the plant is dedicated for export obligations of the company and will be up and running by March 2010.
“Surana Telecom’s revenues last year stood at Rs 97 crore, including Rs 13 crore from its solar business. On the back of the ongoing projects, we expect the solar business to garner Rs 50 crore in revenues by the end of the current financial year. However, being a low-margin and stagnating business, we foresee a 10-20 per cent drop in our telecom revenues this fiscal,” Surana said.
Surana Telecom’s scrip ended the trade at Rs 42.40 on the BSE on Friday, up 19.2 per cent as against the previous close of Rs 41.60.
Source: Business Standard