application as a diversification plan. The company proposes to set up initially a facility to manufacture
200000 units per annum which could be upscaled on a modular basis to 10 Lakh units per annum
after gaining experience in production and as well as marketing of the Lead Acid Batteries
FUTURE OUTLOOK
Since inception, HEB had concentrated on specialized batteries for the Defence application and those
used in aerospace and railways. The company has so far developed and supplied batteries for
various strategic applications and has won several national awards. However, the procurement cycle
of Indian Defence is of the order of four to five years. While some flexibility were available in product
pricing in the earlier years, intense competition from Indian manufacturers has cut down operating
margins severely. Export potential of the present product range on a continuous basis also appears
limited.
Hence the company is currently working to diversify its product range to include manufacture of Lead
Acid Batteries, which will be used in Automobile and UPS applications, for which market offers
tremendous opportunities. The company is aiming at focusing more on value added products, which
helps the company to occupy the strong position both in the Indian and world market.
Overview of the Market and Business
HEB is a manufacturer of hi-tech batteries for use in Army, Navy, Air force and launch vehicles. The
company has a strong base of in-house R&D to design, develop and establish manufacturing, silver
zinc, nickel cadmium and silver chloride magnesium for stringent application such as under water
propulsion, control guidance, communication, emergency starting and for aerospace applications.
The Company can undertake any development activity and establish the technology for the
manufacture of electrochemical system for use in any critical applications.
The back up power requirement is rapidly growing in advent of IT industry and sophisticated
machinery/weaponry. The company received awards for establishment of technology and
indigenization, details of which are listed in page 50 of this Letter of Offer. The market with the
growing Defence expenditure and Government's interest to off-load to private enterprise, the
segment though not huge, grows in a normal phase.
Regarding Nickel Cadmium batteries, the market for Aviation sector is increasing because of open
sky policy of the Government. HEB is in the process of getting Type Approval for various batteries for
various aircrafts and in the near future HEB will make entry into the Civil Aviation. Equally attractive
is the potential for Metro Rail Coaches and HEB has already supplied batteries to Delhi Metro
(DMRC) and is in the final list for DMRC Phase-II. HEB is also supplying batteries for ISRO lauch
vehicle application.
Based on the experience in the technology, HEB Company proposes to diversify into Lead Acid
battery production for various applications.
Considering the growing market potential for the Lead Acid Battery and the technical expertise
available with the Company, HEB has identified Lead Acid Battery market in Automotive and UPS available with the Company, HEB has identified Lead Acid Battery market in Automotive and UPS
application as a diversification plan. The company proposes to set up initially a facility to manufacture
200000 units per annum which could be upscaled on a modular basis to 10 Lakh units per annum
after gaining experience in production and as well as marketing of the Lead Acid Batteries
EQUITY CAP : 90 LAKS
B00K VALUE: 125
LAST EPS 3.5 RS
EXPECTING 20EPS FOR FULL YEAR
EXPECTING DIVIDEND 40%
RIGHTS ISSUED 1.1 RATIOAT 10=90 RS
CURRENT MARKET PRICE 130.65 EXPECTING 200 IN 3 MONTHS TIME
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