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Buoyed by the $530 million (₹3708 crore) investment by KKR for 60 per cent stake in the company valued at $ 925 million (₹6470 crore), Ramky Enviro Engineers Limited, plans to invest about ₹2,500 crore on expansion and new projects.
M Goutham Reddy, Managing Director and CEO of Ramky Enviro, said, “The investment will be spread over the next two to three years and include projects in some select markets in the overseas as well. With a strong investor like KKR backing the company, we would be able to take up next phase of growth”.“The funding requirement would be met through part of the funds we raised, through internal accruals and debt,” he said.
Speaking after the announcement of the KKR’s investment into the company, Reddy said, “Of the ₹1,900 crore turnover the company logged last fiscal, about 30 per cent—$100 million—comes from overseas projects. We expect this to go up by about 5–6 per cent in the near term.” “We operate out of five countries in the Middle East including Oman, UAE, Kuwait; Tanzania and Kenya in Africa; Singapore and other countries in South East Asia and are open to expansion into new countries,” he said.
Post the investment, KKR will hold 60 per cent the rest will be held by Ayodhya Rami Reddy, the company promoter.
Great potential
Ramky Enviro employs about 10,000 people, both directly and indirectly, across its projects and expects this number to go up to 15,000 to 18,000 over the next three years as the business expands.
Providing an insight into the potential, Reddy said about 200 tonnes of waste is generated in urban areas per day and barely 15 per cent is segregated and handled. The opportunity to expand and offer services in this space and tackling industrial, hazardous and medical waste is huge. The Government is focused on major initiatives like the Swatch Bharat, Smart Cities, Amrut project and waste to energy projects and this will only get bigger.
‘Strategic investment’
Sharing KKR’s perspective, Sanjay Nayar, Member and CEO of KKR India, said, “This is a strategic investment made in a company which has immense potent to grow. We have invested for the long term. The focus is on growing its business. We re not in a hurry. The idea is to build scale, then we can think IPO.”
“Several years ago we invested in Dalmia Cement and have made several strategic investments and continue to look forward to new opportunities,” he said.
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