Murugappa Group to invest Rs880 crore

08 May 2006

Chennai: The city-based $1.6-billion turnover Murugappa group has drawn up plans to invest Rs880 crore this year. This is nearly double of what the group units invested last year, (Rs430 crore) though lower than what was actually announced. Interestingly during FY 2004 the group invested Rs260 crore in expanding its units.

The bulk of the fresh investments will be by two constituents of the group viz Tube Investments of India Limited and EID Parry (India) Limited. Both companies will invest around Rs300 crore each.

The other companies that would pump in money are: Rs130 crore by Carborundum Universal Limited (CUMI), Rs40 crore by Coromandel Fertilisers Limited, Rs30 crore by Godavari Fertilisers, Rs25 crore by Parryware Glamourooms Private Limited, while other companies would pump in Rs55 crore.

A major portion of the proposed investment will be made from the accumulated reserves of each company and the balance through debt. Three companies - CUMI, EID Parry and Coromandel Fertilisers are planning to take the external commercial borrowing (ECB) route.

The abrasives major CUMI initially toyed with the idea of a foreign currency convertible bond (FCCB) but later settled in favour of a $20 million ECB.

The group has chalked out ambitious plans and funds are required for which it requires funding. For instance EID Parry has promoted two joint ventures — Parryware Glamourooms and Parrys Sugars Refineries Pvt Ltd — and the company itself is implementing huge expansion programme at an outlay of Rs850 crore. (See )