Public CompanyRuias to raise Rs 100 cr for Falcon, dilute 10% in Dunlop
Tyre maker Ruia Group today said it will raise Rs 100 crore in listed entity Falcon Tyres through private placement of shares and dilute 10 per cent in Dunlop India for capacity expansion over the next few months.
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"We are increasing capacity in Falcon Tyres by 0.5 million units a year with an investment of Rs 300 crore. For this, we plan to raise Rs 100 crore through the Qualified Institutional Placement route," Group Chairman Pawan K Ruia said here.
Mysore-based Falcon Tyres and its Maharashtra-based subsidiary Monotona Tyres have a cumulative 1.25 million yearly tyre making capacity to cater to the two-three wheeler industry.
Ruia said Central Bank of India has approved Rs 100 crore debt to fund the expansion project, while the Group is in talks with other lenders for raising a similar amount.
The Ruia Group holds 86 per cent stake in Falcon Tyres and 74 per cent holding in Dunlop India, which has two tyre making plants at Sahaganj, near Kolkata and at Ambattur in Chennai.
Both these units were shut recently and are now making 40 tonnes of off the road (OTR) tyres per day, he said.
"Once we stabilise the production at 40 tonnes per day-level, we will increase the capacity in both these plants to 130 tonnes per day," Ruia said.
The Group is planning to set up a 50-Mw thermal power plant at Shahganj with an estimated investment of Rs 250 crore.
"The power plant is at the drawing board stage. We have not decided the debt-equity ratio," he said.
However, since the Sahaganj unit would not require entire power, the excess would be sold, Ruia added.