Email
Print
ShareKolkata: Mjunction services, the 50:50 joint venture between Steel Authority of India (SAIL) and Tata Steel, is readying a war chest to acquire an overseas company in the procurement space by 2010-11.
The company has set a target of reaching a transaction value of Rs 50,000 crore by fiscal 2012-13.
Viresh Oberoi, managing director, mjunction services, told DNA Money that while much of this quantum will be mopped up from the company's new business initiatives, the huge kitty (transaction value) will also help in funding inorganic growth.
The acquisition will be done under buyjunction, which provides an electronic platform to companies for sourcing their direct and indirect material requirements. Buyjunction, which was launched in 2002, has procured goods and services worth Rs 10,500 crore till date.
"Funding the acquisition will not be a problem. Our promoters have said whatever resources are required, will be made available," Oberoi said, adding that the size of the company to be acquired and investment required are being weighed at present.
While private equity funding is "being thought about", it is totally up to the joint venture partners to decide on it, Oberoi said.
Mjunction had planned a stake sale of 20% about two years back, which would have mopped up around Rs 150 crore. However, the JV partners didn't agree then, opting to wait in order to receive a better valuation at a later date.
Mjunction is also strengthening the buyjunction platform through tie-ups with international clients. It plans to become the sourcing associate for an overseas player.
"We want to make a breakthrough with one global client first and then more will follow," Oberoi said. The first such tie-up is likely to happen this calendar itself. Mjunction is also looking at opportunities in the steel space through its metaljunction platform. It is exploring opportunities to sell steel for Alang Shipyard.
"Condemned ships are coming to India and selling of scraps is a huge opportunity - it's a two million tonne per annum business," Oberoi said.
