Priyadarshini Spinning Mills draws modernisation plans
21 Sep 2005
Hyderabad: Priyadarshini Spinning Mills Ltd (PSM), has announced plans for aggressive modernisation and expansion of its capacity to gear up to meet the market opportunity thrown up by the opening of the quota regime.
The company plans to invest Rs.40crore towards modernisation and expansion to enhance its spindle capacity from 60,000 units at present to 82,000 units. The company will also increase capacity of its dye house from 45 tonnes to 135 tonnes per month. Of the Rs40 crore, Rs32 crore would be from loans and Rs8 crore from internal accruals.
Modernisation of the present set up will help Priyadarshini reduce cost by 10 per cent. The company had made an investment of Rs9.27 crore in earlier in 2004-2005.
Commenting on the occasion Harish Cherukuri, managing director PSM, said, " The textile industry will witness a massive demand for all kinds of products — from yarn to finished garments. Not only will this demand be from the export market, but the domestic market is expected to have a potential of $55 billion by 2010 .The envisaged expansion and modernization will help us effectively garner some of the market share."
PSM has also applied for a rights issues of 3,78,0000 equity share of Rs10 to raise capital worth Rs945 lakh to meet working capital requirements. The shares will be allotted at a premium of Rs15 and would be offered in the ratio of 5:3 (three shares for every five shares held). The application is pending with SEBI for approval.
The proceeds from the issue would increase the equity from Rs6.3 crore to Rs10 crore, needed for NSE listing, Srinivas Kodali, executive director of the company, said.
The rights issue is expected to hit the market by the end of October. And its share is presently traded at Rs47
The company registered a turnover of Rs139 crore during 2004-05 as against Rs142 crore last year. Due to a change in product mix in favour of low-volume high-value output and induction of corporate clients, profits have increased significantly. The profit after tax (PAT) stood at Rs 2.4 crore during 2004-05 (Rs39.71 lakh).
The textile industry contributes 20 per cent of the total production industry in India. The textile industry contributes to 27 per cent of the total exports. Indian share of the global textile exports at present is at 3-4 per cent, expected to double to 8 per cent by 2010, the domestic market at present stands at $25 billion and expected to grow to $55 billion by 2010.
