Kalindee Rail Nirman Ltd, the New Delhi-based firm that executes railway signalling and telecommunication projects for the Indian Railways
MUMBAI: Kalindee Rail Nirman Ltd, the New Delhi-based firm that executes railway signalling and telecommunication projects for the Indian Railways, is revaluating its expansion and fund-raising plans in the wake of the recent financial turmoil.
Earlier, the company had said it wanted to raise Rs 500-600 crore for taking up large railway orders and to expand into allied sectors. Though Kalindee is sure it wants to raise funds by the end of financial year 2008-09, it has deferred its expansion plan for some time.
Shiv Dayal Sharma, director, said the company’s stock price has fallen substantially. “In the current financial market, raising capital is not advisable. So we will wait till the market stabilises,” he said. Kalindee’s share price has slumped to Rs 111.70 from Rs 600 in the beginning of the year.
Borrowings have also become difficult in the tight credit market. Ram Dayal Sharma, founder chairman and managing director, Kalindee, said that constant calls from lenders for funding the company’s plans have now stopped. “Though getting funds will not be a problem for a strong company like Kalindee, we will have to approach them instead of the other way round,” he said.
Sharma added that Kalindee needs Rs 100-150 crore in the near term to execute its current orders and future requirements would be based on the kind of orders it gets.
Currently, the company’s order book stands at Rs 450 crore and is expected to touch Rs 800 crore by March 2009.
Kalindee has been aggressively bidding for railways, metro and private sidings contracts. Even though some private companies have postponed projects, there has been no fall in projects from the Indian Railways.
Kapil Yadav, an analyst with Dolat Capital, said, “There may be a delay in release of orders related to some railway projects such as Dedicated Freight Corridor. But Kalindee will still be the beneficiary because of its core strengths.”
The company was looking at private equity placement as part of its fund-raising plans but is now reviewing that plan.
Being strong in railway turnkey projects, it is a preferred partner for firms seeking a railway foray.
Companies such as Essar Group and Larsen & Toubro (L&T) have shown interest in picking stake in Kalindee or partnering with it. L&T recently acquired 5% stake in the company from the open market.
But to ward off any hostile takeover, the company’s promoters, R D Sharma and family, are also looking to raise their holding by 5% from 23.57% now by issuing
warrants.
However, the weak financial market may put on hold any issuance of warrants, said a Mumbai-based analyst from a domestic brokerage on condition of anonymity.
s_archana23@dnaindia.net
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