Moser Baer to invest $ 210 mn in India
ENS Economic Bureau

Mumbai, April 15: The Delhi-based manufacturer of floppies and compact disks, Moser Baer India Ltd (MBI), is undertaking a massive expansion of its manufacturing facility at a cost of $ 210 million (around Rs 900 crore). The expansion will increase the capacity of its recordable CDs (CDRs) plant at Noida from 150 million pieces per annum to 750 million pieces.

To part finance the expansion, the firm plans to make a fresh equity issue of $ 90 million through a preferential offer to financial institutional institutions, mutual funds, banks other institutional investors. The US-basedInternational Finance Corp (IFC) is also expected to pick up a stake through the issue. IFC already holds 18 per cent in the company.

The balance amount is to be funded through internal accurals and debt. The shares are likely to be issued at Rs 400 each, Rakesh Govil, general manager (treasury) said. Apart from IFC, other stakeholders in the company are JF Electra (Mauritius) (22 per cent), financial institutions and the public (15 per cent each), and the promoters. Work on the existing plant is expected to be completed in May 2000, the company said.

The company has also earmarked $ 20 million (Rs 87 crore) to acquire brands and distribution companies in Europe. It will look at investments in firms with strong brands and established distribution networks with a view to increasing its presence in Europe. Europe and United States are the largest markets for CDRs.

"This will help us to increase profits by better realisations from marketing branded products," the company said. MBI is the only Indian manufacturer of CDRs and recordable DVDs. Over 80 per cent of its turnover is from exports.

For the year ended March 31, 2000, the company announced total sales of Rs 152 crore (Rs 103 crore) and a 121 per cent growth in profits to Rs 45.2 crore. Govil said demand for CDRs had exploded in the last three years from 190 million in 1997 to 2.1 billion in 1999.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.