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Sunday, May 11, 2008

Varun Industries Ltd

During the financial year 2007-2008, your Company is offering 90,00.000 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 50/- per Equity Share aggregating to Rs. 54 Crores through Initial Public Offer

CORE PROJECTS:-

a. Stainless Steel Kitchenware / Houseware Manufacturing Plant and Warehouse Project

Your Companys most modern manufacturing plant which is the countrys largest manufacturing facility to produce Stainless Steel Kitchenware and Houseware conforming to the international standards, commenced warehousing activities in full swing such as receipt of products, checking, packing and stuffing in containers for export during the financial year under review.

The manufacturing process is in advanced stage with the installation of most of the plant & machinery and equipments and the production is likely to commence during the first half of the current financial year.

b. S. S. Sheet Re-Rolling Project

As part of the backward integration of the Stainless Steel Kitchenware / Houseware Manufacturing Project at Vasai, Dist. Thane,your Company has started establishing a Stainless Steel Sheet Re-rolling Project at jodhpur, Rajasthan having a capacity of 18,000 MT per annum and the total project cost is about Rs. 48 Crores, which is being financed with borrowed funds and internal accruals.

For the said project the Company has already acquired leasehold land plot admeasuring about 10,200 sq yards in the RIICO Industrial Area and the civil construction and erection of Plant and Machinery are in progress and the production is likely to commence in the current financial year.


DIVERSIFICATION:-


a. Agro-product industry

As mentioned in last years report, your Company has penetrated into Agro-based product by taking 45% stake in a company "Sapling Agrotech Private Ltd." which is a 100% EOU near Kolkata for producing and exporting "White Button Mushroom" under the technical and commercial arrangement with Dalsem Mushroom Projects B.V.Netherlands.

The total project cost stands around Rs.24 Crore and is the largest of its kind in the eastern India. The plant commenced trial/commercial production during 2007 and was formally inaugurated by Shri Nirupam Sen, Honble Minister for Commerce &

Industries, Govt, of West Bengal on Wednesday the 9th of May, 2007, where Shri Mohanta Chatterjee, Honble Minister for Food Processing Industries & Horticulture Dept., Govt, of West Bengal was the Chief Guest and Shri Binay Krishna Biswas, Honble Minister for Refugees & Rehabilitation Dept., Govt, of West Bengal was the Guest of Honour.

Considering the technical inputs received during the period of trial/commercial run and with certain technical modifications in the plant, the Companys full-fledged production for catering to the export market and a reasonable Quantity for the domestic market, where demand is very much encouraging is likely to commence very soon.

b. Power Generation

(i) Wind Electrical Power

With the successful installation of 3 Wind Power Turbines of 1.25 MW each with combined Power generation of 3.75 MW in Rajasthan to supply power to the Ajmer Vidyut Vitaran Nigam Limited, the Company has installed 2 more Wind Turbine Generators of 0.60 MW each, enhancing the total power generation capacity to 4.95 MW, with the total investment of Rs.24 Crore with concomitant increase in income from the sale of power. Your Company is continuing to pursue such opportunity to set up more Wind Mills.

(ii) Hydro-electrical Power

The Companys bid of |une, 2006 for setting-up of 60 MW Hydro-electric Power Project at Kinnaur in Himachal Pradesh after having technical and execution tie- ups with TCE Consulting Engineers Ltd. and Hindustan Construction Company Ltd., respectively is under consideration of the Government of Himachal Pradesh alongwith other bidders.

c. Iron Ore Mining

(i) Mines at village Siddhapura

Raising of Iron Ore by the Company from these mines having an area of 108 acres with estimated results of above 10 million tonnes located near Village Siddhapura, Dist. Bellary (Karnataka) under contract from Shri Anjaneya Kadam is expected to commence from August, 2007, subject however to the clearance by the Forest Department of Central Govt, and execution of Lease Deed.

(ii) Mines at village Narayanpura

Various approvals / clearances from the Government of Karnataka and the Central Government are under process and after having obtained these approvals / clearances, the Lease Deed in favour of the Company will be executed and thereafter the work will start at the Companys mines having an area of about 103 acres with estimated results of about 9 million tonnes located near Village Narayanpura, Dist. Bellary (Karnataka).

d. Petroleum & Natural Gas

Your Company, in collaboration with established technical partners viz. Oil and Gas Drilling Company "NAFTA" Pilla Limited, Poland, Shandong Kerui Petroleum Equipment Company Limited, China and IROilRigs Middle East Limited, Hong Kong has submitted several competitive and technically viable offers to premier public sector units viz. ONGC and Oil India Limited against their global tenders such as two bids of value of Rs.74 Crores and Rs. I74 Crores for Charter Hiring of three Drilling Rigs for Oil India Limited and one bid of value of Rs.330 Crores for two Deep Land Drilling Rigs for ONGC. The said bids are under scrutiny and consideration. Your Company is very hopeful of being awarded with at least one or two jobs being technically and financially competitive.

The Company is also endeavoring to enter in offshore drilling and is in the process of bidding for several high value tenders of ONGC.

e. Real Estate

Your Company did not make aggressive move to enter into real estate market due to its high volatility throughout India. After considering the same and taking a cautious move, the Company is in readiness to persue into Real Estate Industry preferably in Eastern India at Kolkata and Bhubaneshwar the nations current destination for real estate where it is booming for consumers markets and with smaller capital investment and very low risk factor.


buy this company for long term investment view for one year .

currently it is trading at 75.and promoters hold 70%.and book value is at 77 rs.last year dividend is 45%.

just buy and hold .it will double in six months easily






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