October 11, 2008

Ajmera Group to hive off steel arm for better funding

BS reported that Ajmera Group’s subsidiary Shree Precoated Steels Limited is hiving off its steel business as a separate company soon and that its board has already approved the change of company’s name to Ajmera Realty & Infrastructure.

Mr Dhaval Ajmera director of Ajmera Group of Companies said that "Private equity players, analysts and investment bankers have advised us to hive off our steel business into a separate sector specific company to get better funding. We were affected by the curbs on real estate lending. This has prompted us to hive off the steel business."

Shree Precoated Steels reported a top line of INR 458.43 crore for the October to December 2007 quarter, with contribution from steel being INR 373.58 crore and realty chipping in with INR 84.85 crore. The realty business contributed INR 55 crore and steel business INR 16 crore to the bottom line.

Mr Ajmera said that it is expecting a top line of nearly INR 2,000 crore from steel and INR 1,000 crore from real estate in the next financial year. While steel would contribute nearly INR 75 crore to the bottom line, realty’s share would be around INR 400 crore in the period. He added that "In the next 3 years, our top line will be equally derived from steel and real estate. We are exploring private equity participation in both the businesses."

Shree Precoated Steels is a steel sheet manufacturer with real estate interests in Mumbai and Bangalore.