ET reported that Hinduja Foundries is planning to come out with a INR 125 crore rights issue even as the country’s largest casting maker is facing delay in its proposed plant at Toopran in Andhra Pradesh.

The company, promoted by Ashok Leyland and Hinduja Automotive, would vacate the land acquired for that endeavor if it does not receive one more year’s extension. The 1959 founded firm, with three plants now, has sought to restructure its loans to the tune of INR 205 crore.

Mr B Swaminathan MD of Hinduja Foundries said that “We have asked the banks to defer the repayment of the principal amount in the event that there are any unanticipated downturns in the industry.”

The investment of INR 70 crore is towards equipment for capacity balancing and machining. He added that “We are equally focused in improving capacity utilization by 30%. There are also plans to expand our capacity and commence supplies in the larger weight segment of up to 500 kg casting weight.”

Last year, the city-headquartered company had raised INR 50.27 crore by issue of equity shares on a rights basis. One of the main objectives, constituting more than 50 per cent of the issue size, was capital expenditure on the existing plants.

The draft offer document said Hinduja Foundries’ business strategy or growth plans might require it to raise additional capital in the future. It noted that “This could be through debt or equity capital, including through issue of shares to our promoters. If we raise further equity capital, there can be no assurance that such an issue will be on a rights basis. Any issue of shares other than on a rights basis will lead to a dilution of your equity stake.”

As for its plan to set up a Greenfield manufacturing unit at Toopran, the company recalled that it had already acquired 60 acres of land from the state government and paid INR 15 crore.

(Sourced from ET)