Edible oil firm KS Oils on Tuesday announced it will raise Rs 450 crore from private equity funds
, promoters and a new global depository receipt (GDR) issue.
ET had reported the company’s fund-raising plans on Tuesday. PE firm New Silk Route will invest Rs 135 crore in the firm in return for a 7% stake through preferential allotment of equity shares. The promoter Garg family will put in Rs 157 crore and existing investors Citigroup Venture Capital International and Baring Private Equity Asia will invest Rs 49 crore each by subscribing to convertible warrants. KS Oils will raise another Rs 60 crore through a GDR issue.
In a statement to BSE, the firm said it will use the funds to expand its palm plantation assets in south-east Asia. KS Oils owns mustard oil brands such as Kalash, Double Sher and KS Gold.
The company recently reported a 53.8% increase in net sales to Rs 3,143 crore for the financial year ended March 31, 2009. Net profit for the year grew 44.6% to Rs 174.5 crore.
“The company’s profitability and margins are constantly improving on account of its increasing presence in the high-margin branded segment,” Angel Broking said in a recent note on KS Oils. The brokerage firm said the edible oils firm’s strategy of setting up its manufacturing locations close to its target markets as illustrated by its recent acquisition (of a refinery at Haldia port) is expected to further improve its profitability.
KS Oils claims to enjoy a 7% market share in the mustard oil segment, and a 25% share in the branded mustard oil segment. India is one of the world’s biggest consumers of edible oils, importing 5- 6 million of edible oils every year.
Source: Economic Times