PE major KKR-backed Walchandnagar Industries Ltd (WIL) is planning an equity fund raise of upto ₹200 crore in the next couple of quarters to partly retire debt and finance capital expenditure plans. Mumbai-based WIL is exploring various options such as roping in a private equity investor, or go for rights issue or a Qualified Institutional Placement (QIP).
“This will be a new issue, and the promoters are not offloading any stake and as it would be done through issuance of new shares. The money has to come into the company and the fund-raising is mainly targeted to bring down some of our debt and for capital expenditure next year,” Chirag Doshi, Managing Director at WIL told BusinessLine .
“The capex is to expand our business substantially. The timing we don’t know yet,” he added.
WIL, raised about ₹237 crore through a structured debt from KKR in 2017. Its total debt is about ₹400 crore as of December 31, 2018. The company is also planning to ramp-up existing facilities through brownfield expansion as it expects a “huge” order book opportunities from Defence, nuclear, aerospace, missiles and industrial gears over the next 18 months. With a current order book of ₹850 crore, firm is also in talks with Tatas and UK-based BAE Systems to become their preferred vendor.
Over the past five years, WIL has been moving into high-end engineering, critical manufacturing and fabrication businesses. This transition has helped the company improve EBITDA margins to about 20 per cent, with a ₹400 crore profit, compared with negative EBITDA margins of about 3 per cent in FY13.
“In the nine month period of the current financial year, we had a net profit of ₹4.2 crore, and we are looking at posting profit this year after about four years. Except for the two projects we are finishing now, we are completely out of EPC business,” Doshi added.