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July 16, 07

KS Oils may raise Fresh Capital

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KS Oils is planning to raise fresh capital of about Rs. 400 crore. Sanjay Agarwal, MD & CEO, KS Oils said that the money would be raised through various channels like private equity, GDR, FCCB and promoters'. bringing in capital. He added that this capital would be used to enhance their capacity. "Total oil mill capacity after this will be 5,254 metric tonnes - solvent would be 3,900 metric tonnes and the refinery would be 1,400 metric tonnes," he explained. He also said that they are targeting a 20% share in the mustard oil market.

Excerpts of CNBC-TV18's exclusive interview with Sanjay Agarwal:

Q: Rs. 400 crore, give us a break up of what instruments are you using to raise this amount of money?

A: This is by way of private equity of Rs. 90 crore; bearing is coming in the private equity, Rs. 90 crore by way of GDR, Rs. 120 crore is by way of FCCB and promoters'. are also paying Rs. 100 crore. This is the break up of Rs. 400 crore.

Q: So what amount of dilution is it resulting into?

A: This is a 15% dilution, but the promoter is also bringing Rs. 100 crore. So promoter stake will remain in the company after the post-issue.

Q: What would you utilise this amount of money for?

A: This money will be utilised for enhancement of capacity - the oil mills capacity by 4,000 metric tonnes, our solvent extraction capacity by 3,000 metric tonnes and the refinery capacity by 1,000 metric tonnes. So total oil mill capacity after that will be 5,254 metric tonnes, solvent would be 3,900 metric tonnes and the refinery would be 1,400 metric tonnes.

Q: Post this capacity expansion, what sort of topline addition do you think it will result into?

A: We are looking for a 20% market share in the mustard oil segment. Presently, we have 4 to 5% share. We are expecting a 20% market share after this expansion.

Q: There were rumors. about you scouting for acquisitions in the market, any more developments in that front?

A: No, not right now.