MIRA
INFORM REPORT
|
Report Date : |
17.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
WELSPUN GUJARAT
STAHL ROHREN LIMITED |
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Registered Office : |
Village
Jolva and Vadadla, Near Dahej, Taluka – Vagra, District –Bharuch, GUJRAT –
392130 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
26.04.1995 |
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Com. Reg. No.: |
11-25609 |
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IEC No. : |
0895004801 |
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CIN No.: [Company
Identification No.] |
L27100GJ1995PLC025609 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRDW00071B / RKTW00064B |
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PAN No.: [Permanent
Account No.] |
AAACW0744L |
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Legal Form : |
It is
a Public Limited Liability Company.
The company's shares are listed on the stock exchanges. |
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Line of Business : |
Manufacturing
of Longitudinal Slow Pipes, Spiral Slow Pipes, HFIW Pipes, Pipe Coating and
API Grade Pipes. |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 26141160 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having satisfactory track records. Directors are reported
as experienced, respectable and resourceful industrialists. Their trade relations
are fair. Financial position is satisfactory. Payment are usually correct and
as per commitments. The company can
be considered normal for business dealings at usual trade terms &
conditions. |
LOCATIONS
|
Registered Office : |
Village Jolva & Vadadla, Near Dahej, Taluka – Vagra,
District –Bharuch, GUJRAT – 392130, India |
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Tel. No.: |
91-2641-256011/281 |
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Fax No.: |
91-2641-256285 |
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E-Mail : |
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Website : |
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Area : |
3288362 sq .fts. - Owned |
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Corporate Office : |
Trade World, ‘B’ Wing, 9th Floor, Kamala Mills Compound,
Senapati Bapat Marg, Lower Parel, Mumbai-400013, Maharashtra, India |
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Tel. No.: |
91-22-56503000 / 5650 3333 / 2490 8000 / 66136000 |
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Fax No.: |
91-22-24908020 / 21 |
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Factory 1 : |
Village Jolva and Vadadla, Near Dahej Taluka Vagra, Bharuch
District - 392130, Gujarat, India |
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Tel. No.: |
91-2461-266011 / 256281 |
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Fax No.: |
91-2641-256285 |
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E-Mail : |
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Website : |
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Areas : |
3288362 sq .fts. - Owned |
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Factory 2 : |
Village Versamedi, Taluka Anjar, District – Kutch,
Gujarat, India |
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Tel. No.: |
91-2836-279000 / 573428 / 29 |
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Fax No.: |
91-2836-279010 / 247070 |
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Areas : |
4950518 sq .fts. - Owned |
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Branches : |
36, Bawa Potteries Complex, Aruna Asaf Ali Marg, Vasant
Kunj, New Delhi - 110 070, India |
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Tel. No.: |
91-11-2602 2051 / 2612 2054 |
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Fax No.: |
91-11- 2612 2064 |
DIRECTORS
|
Name : |
Mr. Gopiram R. Goenka |
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Designation : |
Chairman |
|
Address : |
Gayatri Villa, Sultanpur Mandi Road, Near Mehrauli, New
Delhi – 110030 |
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Name : |
Mr. Balkrishan Goenka |
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Designation : |
Vice Chairman and Managing Director |
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Address : |
6, Chancellore Court, A/88, Carmicheal Road, Mumbai –
400026 |
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Qualification : |
B. Com |
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Name : |
Mr. Rajesh R. Mandawewala |
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Designation : |
Director |
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Address : |
171, B Wing, 17th Floor, Tanna Redisency, Bay
view, 392, V. S. Marg, Prabhadevi, Mumbai – 400026 |
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Qualification : |
B. Com , A.C.A |
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Name : |
Mr. Murarilal Mittal |
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Designation : |
Director (Finance) |
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Address : |
1601, Marathon Heights, P. B. Marg, Jia BharaT Oil Mills
Compound, Lower Parel, Mumbai – 400013 |
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Qualification : |
A.C.A |
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Name : |
Braja K. Mishra |
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Designation : |
Chief Executive Officer S Board Member |
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Address : |
C-2-5, Loyds Garden, Appa Saheb Marathe Marg, Prabhadevi,
Mumbai – 400020 |
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Qualification : |
B. Com and MBA |
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Name : |
Mr. Raj Kumar Jain |
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Designation : |
Director |
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Address : |
A/ 42, Manali, Evershine Nagar, Malad (West), Mumbai –
4000064 |
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Qualification : |
A. C. A. |
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Name : |
Mr. K. H. Viswanathan |
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Designation : |
Director |
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Address : |
Plat No. 4, Kalyani Uttam Society, Antony Road, Chembur, Mumbai - 400071 |
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Qualification : |
ICWA |
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Name : |
Mr. Sanjeev Ghai |
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Designation : |
Nominee Director of IFCI Limited
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Name : |
Mr. Ram Gopal Sharma |
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Designation : |
Director |
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Address : |
707, Look Shrtia, Military Road, Off. Marol Maroshi Road,
Andheri (East). Mumbai – 400059 |
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Qualification : |
B. Com, Master in
Ecomomics |
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Name : |
Mr. Nirmal Gangwal |
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Designation : |
Director |
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Name : |
Mr. N.Shankar |
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Designation : |
Nominee of Export Import Bank of India |
KEY EXECUTIVES
|
Name : |
Mr. Ramesh H. Ved |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.09.2007
|
Category of Shareholders |
No.
of Shares |
%
of Holding |
|
Shareholding of
Promoter and Promoter Group2 |
|
|
|
Indian |
|
|
|
Individuals/ Hindu Undivided Family |
287 |
0.00 |
|
Central Government/ State Government(s) |
- |
- |
|
Bodies Corporate |
51,041,821 |
29.77 |
|
Financial Institutions/ Banks |
- |
- |
|
Any Others(Specify) |
- |
- |
|
|
|
|
|
Sub Total(A)(1) |
51,042,108
|
29.77 |
|
|
|
|
|
Foreign |
|
|
|
Individuals (Non-Residents Individuals/
Foreign Individuals) |
-- |
-- |
|
Bodies Corporate |
14,865,523 |
8.67 |
|
Institutions |
- |
- |
|
Any Others(Specify) |
- |
- |
|
|
|
|
|
Sub Total(A)(2) |
14,865,523
|
8.67 |
|
|
|
|
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Total
Shareholding of Promoter and Promoter
Group (A)= (A)(1)+(A)(2) |
65,907,631
|
38.43 |
|
|
|
|
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Public
shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds/ UTI |
23,226,072 |
13.54 |
|
Financial Institutions / Banks |
1,650,318 |
0.96 |
|
Central Government/ State Government(s) |
- |
- |
|
Venture Capital Funds |
- |
- |
|
Insurance Companies |
1,555,233 |
0.91 |
|
Foreign Institutional Investors |
27,971,827 |
16.31 |
|
Foreign Venture Capital Investors |
- |
- |
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Any Other (specify) |
- |
- |
|
|
|
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Sub-Total (B)(1) |
54,403,450 |
31.73 |
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Non-institutions |
|
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Bodies Corporate |
17,733,169 |
10.34 |
|
Individuals |
- |
- |
|
Individuals -i. Individual shareholders
holding nominal share capital up to Rs 0.100 million |
12,816,849 |
7.47 |
|
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million |
9,341,938 |
5.45 |
|
Any Other (specify) |
- |
- |
|
Overseas - Bodies Corporate |
11,277,948 |
6.58 |
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|
|
|
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Sub-Total (B)(2) |
1,169,904 |
29.84 |
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|
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Total Public Shareholding
(B)= (B)(1)+(B)(2) |
105,573,354 |
61.57 |
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TOTAL (A)+(B) |
171,480,985 |
100.00 |
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Shares
held by Custodians and
against which Depository Receipts
have been issued |
-- |
-- |
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|
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GRAND TOTAL
(A)+(B)+(C) |
171,480,985 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing
of Longitudinal Slow Pipes, Spiral Slow Pipes, HFIW Pipes, Pipe Coating and
API Grade Pipes. |
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Products : |
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Exports : |
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Products: |
Steel Pipes |
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Countries : |
USA
and Indonesia |
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Imports : |
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Products: |
Steel |
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Countries : |
Austria
and Germany |
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Terms : |
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Selling : |
L/C |
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Purchasing : |
L/C
and Credit (Local 60-Import 180 days) |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Coating of pipes |
000 SQMS |
14500 |
1890 |
|
Welded pipes |
MT |
930000 |
377271 |
|
M. S. Plates |
MT |
12000 |
78 |
|
M. S. Pipe |
MT |
NA |
4 |
GENERAL
INFORMATION
|
No. of Employees : |
1720 |
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Bankers : |
Ø Bank of Baroda Ø Punjab National
Bank Ø Canara Bank Ø Oriental Bank of
Commerce Ø Syndicate Bank Ø Bank of India Ø State Bank of
India Ø Andhra Bank Ø State Bank of
Bikaner & Jaipur Ø ICICI Bank
Limited Ø State Bank of Tranvancore Ø Industrial
Development Bank of India |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
MGB & Company Chartered Accountants Mumbai |
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Associates/Subsidiaries : |
Welspun
India Limited, Survey
No. 1076, Village and P. O. Vapi District Valsad Mumbai Tarry
Towel Manufacture Welspun
Syntex Limited Survey No. 094 Village Saily Manufacturer
of specialty polyester filament yarn Welspun Gujarat Stahl Rohren Limited Welspun Zucchi Textiles Limited Welspun Power & Steel |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
234,000,000 |
Equity
Shares |
Rs. 5/-each |
Rs. 1170.000 millions |
|
98,000,000 |
8%
cumulative preference shares |
Rs. 10/-each |
Rs. 980.000 millions |
|
|
Total |
|
Rs. 2150.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
139,820,333 |
Equity shares |
Rs. 5/- each |
Rs. 699.100 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
699.100 |
865.270 |
756.400 |
|
|
2] Share Application Money |
68.450 |
68.450 |
0.000 |
|
|
3] Reserves & Surplus |
5767.740 |
4082.560 |
2172.090 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
6535.290 |
5016.280 |
2928.490 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
11635.080 |
3933.280 |
2040.410 |
|
|
2] Unsecured Loans |
3511.150 |
4093.690 |
1806.330 |
|
|
TOTAL BORROWING |
15146.230 |
8026.970 |
3846.740 |
|
|
DEFERRED TAX LIABILITIES |
793.950 |
700.920 |
538.530 |
|
|
|
|
|
|
|
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TOTAL |
22475.470 |
13744.170 |
7313.760 |
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
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|
FIXED ASSETS [Net Block] |
7234.650 |
6490.310 |
3974.850 |
|
|
Capital work-in-progress |
9213.650 |
3622.510 |
1376.480 |
|
|
|
|
|
|
|
|
INVESTMENT |
256.290 |
0.010 |
52.890 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
5135.150
|
5428.870 |
0.180
|
|
|
Sundry Debtors |
5849.380
|
3069.750 |
3756.770
|
|
|
Cash & Bank Balances |
3433.90
|
3066.550 |
2623.300
|
|
|
Other Current Assets |
0.000
|
0.000 |
2460.990
|
|
|
Loans & Advances |
1910.870
|
1222.59 |
852.850
|
|
Total
Current Assets |
16329.300
|
12787.760 |
9694.090 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
10089.780
|
9031.020 |
7649.780
|
|
|
Provisions |
468.640
|
125.390 |
134.770
|
|
Total
Current Liabilities |
10558.420
|
9156.410 |
7784.550 |
|
|
Net Current Assets |
5770.88
|
3631.350 |
1909.540 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
22475.470 |
13744.170 |
7313.760 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
26784.820 |
18297.660 |
10384.88 |
|
|
Other Income |
42.730 |
19.110 |
262.08 |
|
|
Total Income |
26827.550 |
18316.770 |
10646.960 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
2191.080 |
903.540 |
501.300 |
|
|
Provision for Taxation |
765.220 |
289.820 |
163.000 |
|
|
Profit/(Loss) After Tax |
1425.860 |
613.720 |
338.300 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
NA |
NA |
6181.730 |
|
|
Commission Earnings |
NA |
NA |
649.530 |
|
|
Other Earnings |
NA |
NA |
0.310 |
|
Total Earnings |
NA |
NA |
6831.570 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
NA |
NA |
6692.350 |
|
|
Stores & Spares |
NA |
NA |
62.330 |
|
|
Capital Goods |
NA |
NA |
1001.350 |
|
|
Others |
NA |
NA |
0.000 |
|
Total Imports |
NA |
NA |
7756.030 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods Sold |
20224.010 |
13573.64 |
8073.410 |
|
|
Manufacturing Expenses |
3228.850 |
3068.840 |
1627.900 |
|
|
Financial
Expenses |
708.060 |
418.850 |
203.390 |
|
|
Depreciation & Amortization |
475.550 |
351.900 |
240.960 |
|
Total Expenditure |
24636.470 |
17413.230 |
10145.660 |
|
QUARTERLY RESULTS
|
PARTICULARS |
31.12.2007 |
30.09.2007 |
30.06.2007 |
|
Type |
3rd Quarter |
2nd Quarter |
1st Quarter |
|
Sales Turnover |
10364.000 |
9276.000 |
8067.000 |
|
Other Income |
22.000 |
22.000 |
8.000 |
|
Total Income |
10386.000 |
9298.000 |
8075.000 |
|
Total Expenditure |
8623.000 |
7743.000 |
6734.000 |
|
Operating Profit |
1763.000 |
1555.000 |
1341.000 |
|
Interest |
143.000 |
172.000 |
155.000 |
|
Gross Profit |
1620.000 |
1383.000 |
1186.000 |
|
Depreciation |
145.000 |
127.000 |
120.000 |
|
Tax |
501.000 |
431.000 |
373.000 |
|
Reported PAT |
974.000 |
825.000 |
693.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
|
2.03 |
1.51 |
1.08 |
|
Long Term Debt-Equity Ratio |
|
1.90 |
1.30 |
0.85 |
|
Current Ratio |
|
1.27 |
1.13 |
1.10 |
|
TURNOVER RATIOS |
|
|
|
|
|
Fixed Assets |
|
3.21 |
2.89 |
2.50 |
|
Inventory |
|
5.17 |
4.07 |
4.48 |
|
Debtors |
|
6.12 |
6.57 |
5.59 |
|
Interest Cover Ratio |
|
3.93 |
2.70 |
2.59 |
|
Operating Profit Margin(%) |
|
12.51 |
9.55 |
10.12 |
|
Profit Before Interest And Tax
Margin(%) |
|
10.77 |
7.67 |
7.81 |
|
Cash Profit Margin(%) |
|
6.97 |
5.16 |
5.54 |
|
Adjusted Net Profit Margin(%) |
|
5.23 |
3.28 |
3.23 |
|
Return On Capital Employed(%) |
|
16.99 |
14.52 |
15.47 |
|
Return On Net Worth(%) |
|
25.45 |
15.96 |
13.67 |
LOCAL AGENCY FURTHER
INFORMATION
Biodata:
Subject, was incorporated as a public ltd company on 26th Apr.'95, and on 12th May obtained a certificate for commencement of business. The company was promoted by B K Goenka and R R Mandawewala belonging to subject Group. The company is now managed by G R Goenka. The company is presently engaged in manufacturing of varieties of a Submerged Arc Welded Pipes (SAW).
The company has came out with new project for the manufacture of Large Diameter
Spiral and Longitudinal Submerged Arc Welded Steel Pipe with an installed
capacity of 25000 and 175000 TPA and also setting up a new project for Pipe
Coating Plant with an installed capacity of 100000 TPA at Gujarat. To overcome
the above expenses the company has came out with Public Issue of 20,00,000
Equity Share of Rs. 10/- each for cash at par aggregating Rs. 520.000 crores.
Commercial production of Spiral Pipes commenced on 01.07.97.
After a long struggle and several impediments, in 1998-99, the company
sucessfully commissioned the phase II of the longitudinal pipe plant. It also
executed a 50% joint venture agreement with Eurec PipeCoatings, Germany for
pipe coating.
The company has tied up with M/s Lonestar Steel Co., a reputed firm in the USA
for multi year agreement for marketing the company's large dia Submerged Arc
Welded pipes in North America, South America, U.K., Middle East and Far
East.
WSRL has merged Eupec-Welspun PipeCoatings (India) Ltd (EWPCI) with itself with
effect from 1st April 2003. Accordingly, the company has allotted ten equity
shares of Rs.10/- each of WSRL to the shareholders of EWPCI for every 15 equity
shares of Rs.10/- each held by them in Eupec-Welspun PipeCoatings (India)
Ltd.
The new plant in Anjar, Gujarat is in progress and after the completion of the
plant the company will be able to roduce a total of 850,000 mtpa of LSAW pipes;
280,000 mtpa of Spiral pipes; and 250,000 mtpa of HFIW/ERW pipes and 10 mn
meters of coating. The HFIW and Sprial of 100,000 mtpa plant has already been
commissioned by 30th June 2005. The LSAW pipes plant and balance 150000 mtpa of
Spiral plant are expected to be commissioned by 30th November 2005.
During 2004-05 the company has increased its installed capacity of Welded pipes
and Coating of pipes by 350000 MT and 10100 000SQMS respectively. With this the
total installed capacity of Welded pipes and Coating of pipes has increased to
730000 MT and 14500 000SQMS respectively.
FIXED ASSETS
Ø Land
Ø Building
Ø Plant and
Machinery
Ø Office and Other
Equipments
Ø Vehicle
Ø Furniture And
Fixtures
PROSPECTS:
Both the plants at Bharuch and Anjar have sufficient domestic as well as export
orders for execution. Some of the major orders, which the Company is currently
executing, are from Indonesia, USA and Russia valued at Rs.10,544 Millions.
The Company is setting-up 1 Millions tonnes Plate-Cum-Coil Mill to meet its
captive requirement of high-grade plates for the Spiral and LSAW pipe. It would
obviate the need to import plates and would also be instrumental in achieving
significant growth in profit margin.
The Plate mill is expected to be fully operational by December 2007.
MANAGEMENT
DISCUSSION AND ANALYSIS
A bird's eye view - Industry
Scenario:
Submerged Arc Welded (SAW) pipes have been recognized as one of the most efficient
means of transporting Oil & Gas, water and petro-products. The estimated
global demand of the pipes is expected to be over 50000 kilometers over the
next five years.
Globally, the transportation of petroleum products by pipelines is usually preferred
to other modes of transportation due to operational economies, coupled with
benefits of a cleaner distribution chain. Pipelines are generally the most
cost-effective way of transporting petroleum products (crude, petrol and
diesel) and natural gas. It costs approximately Rs.1.30/km to move every tonne
of oil product by pipeline, while rails cost Rs. 2.20/km, and road Rs.3.02/km.
Similarly, the cost of intercontinental transportation of oil via tanker is
approximately Rs.2 per litre/km, vis-a-vis approximately Rs.0.40 per liter/km
via pipelines.
Therefore pipelines are effectively the most viable business proposition in the
transportation of Oil, Gas, Water and petroleum products.
The Ministry of Petroleum & Natural Gas (MOP&NG) India, estimates that
in developed countries around 60% of total petroleum products is transported
through pipelines while in India, this percentage is presently around 32%. The
Ministry estimates that the share of pipelines in product transportation might
touch around 45% in India over the next 2-3 years.
The demand of pipes may be classified into the following
major segments:
1. ENERGY SECTOR:
Growing energy demands of developed and developing countries have largely
dictated the health of the oil & gas pipe industry. Transnational lines
that traverse thousands of kilometers, like the North European Gas Line from a
remote corner of Russia to stable markets like Germany/France, Myanmar-India,
Iran-India notwithstanding political compulsions have generated demand for
premium quality large diameter pipes like never before.
Hectic drilling activity in offshore fields perhaps due to the fact that the
crude is around $7/per barrel and still going up, has resulted in huge
casings/tubings and other pipe requirements. The offshore lines linking these
fields/marginal fields to main hubs have resulted in huge demand of such
pipes.
2. OIL & GAS:
DOMESTIC MARKET:
Increase in Oil & Gas exploratory
activities:
As the world witnesses record high prices for oil, there is mounting pressure
on all major oil producing and consuming nations to secure long-term supply
contracts. The Indian Oil & Gas industry are preparing themselves to secure
sustainable energy sources for long-term and medium term. Keeping this in mind
the Government of India has announced the National Exploration Licensing Policy
(NELP) for stimulating exploration activities both in offshore shelf's and
within the country. More oil discoveries in the country and worldwide will
require oil products to be disbursed quickly and efficiently thereby increasing
the demand for the steel pipes.
Recently Oil & Gas pipelines have been awarded the infrastructure status
and with this recognition they estimate a huge jump in the Oil and Gas pipeline
requirements .It is estimated that the expected demand from the oil and gas
sector in India would be about 25,000 km of pipelines over the next 10 yrs and
the global demand for SAW pipes is expected to grow to 100,000-120,000 Kms with
a annual domestic demand is expected to grow to 2500-3000 Kms for the same
period over the next 5-7 years. Even if 50 per cent of the projects fructify in
the given timeframe, the domestic pipe companies will witness a quantum jump in
business opportunity. Domestic manufacturers are expected to capture almost
100% of these domestic opportunities, as imports of such pipes may not be cost
effective due to current import tariff and logistics.
A look at the statistics below would show that as on date transportation of
oil and natural gas through dedicated pipelines currently constitute only
approximately 32% of the total oils and natural gas transportation in India,
significantly lower than the penetration in many developed countries.
India produces about 90 million standard cubic meters of natural gas per day as
against its daily demand of 120 million standard cubic meters that is likely to
go further in the coming years. The projected demand of natural gas in India by
2020 stands at a staggering 400 million standard cubic meters a day. Though
some of this demand will be met domestically, a large gap would remain.
Based on plans announced by major Oil & Gas majors and in line with the
Petroleum Ministry's Hydrocarbon Vision statement 2025, the domestic demand for
SAW pipes is expected to grow exponentially in the next 5-10 Years. A look at
the figures below would substantiate the same:
India currently has about 15,000 km of pipelines transporting crude oil,
refined products and gas in the country. Domestic investment in the pipeline
infrastructure has been quite low, particularly in gas pipelines, due to lack
of gas supply. However, due to recent gas finds such as the Reliance and
Gujarat State Petroleum Corporation Limited, (GSPCL) gas finds in the Krishna
Godavari Basin, India will require increased investments in pipelines as gas
will need to be transported to areas of consumption.
Increased availability of natural gas in northern and western India should spur
improved infrastructure for gas transportation. In view of these developments,
players such as Gas Authority of India Limited (GAIL), GSPCL, ONGC, Cairn and
Reliance have proposed investing in an additional 20,300 km in pipeline
infrastructure over the next five years.
The National Gas Grid:
India's gas consumption to grow at an annual rate of 5.1% between 2002 to 2025,
to 2.6 trillion cubic feet in 2025. This has prompted the formation of what is
now known as the National Gas Grid. The National Gas Grid comprising 13
sections would span 6,463 km - which translates into an opportunity of around
Rs.40-58 bn for Indian pipe manufacturers.
It is estimated that the remaining unordered 11 sections of the National Gas
Grid represents a potential opportunity of Rs.36-54 bn. The total opportunity
represented by the National Gas Grid and other projects amounts to Rs.94.5 bn
(US $2.1 bn) over the next five years.
INTERNATIONAL MARKETS:
The prime demand for pipes internationally accrues from Middle East, U.S. Europe,
and now Africa. In effect most of the continents are getting linked through
these huge transnational pipelines like the Trans Saharan in Africa, the
Connector lines in America, the North European Gas Pipeline (NEGP) line in
Eurasia and so on.
On the other hand, increasing demand of petroproducts has spurred setting up of
additional refining capacities and be it Sudan, Russia, Malaysia. Due to demand
in all these areas, there has been a concomitant increase in the demand for
pipelines which are by the far the most economically viable means of
transporting all of the above.
Profile: About Them
Since its inception in 1985 with
a small Textile unit, subject group has grown rapidly to become a market leader
in every segment that it operates viz. Terry towels, Yarns and SAW pipes.
Today, subject has an expected turnover of Rs. 45,000 Million for the current
year (of which more than Rs.35,000 Million is expected from exports), 16,000 +
employees, presence in 50 countries and over 50,000 shareholders. The market
capitalization of the group stands at approx Rs.25,000 million.
WGSRL - A manufacturing hub for state-of-the-art pipe and
related niche products. Incepted in 1995, it is the preferred choice for the Energy
Transportation Sector - Be it Oil, Gas, Crude or Water. WGSRL is a dynamic
setup where quality, integrity and values form the core strength for success.
Incorporated in 1995, subject (“Welspun” or “the Company”)
part of $ 1bn subject Group
Caters to the global requirement of Welded Tubes and Pipes.
The company has the widest range starting from 1/2 inch to 100 inch of outer
diameter.
Manufactures high grade line pipes-Submerged Arc Welded
(both spiral and longitudinal), branch pipes (Electric Resistant Welded
Pipes-ERW) and coating.
Manufacturing facilities are located in Gujarat (Western
India), in proximity to the National Highway and Seaports.
Incorporates the very best technology across the globe with
Capello Tubi Italy and SMS Meer Germany (Mannesmann Demag) and EUPEC, Germany.
Accredited with ISO 9001, ISO 14001 and OHSAS 18001
certifications.
Strong order book from Middle East , U.S. , Indonesia and
other countries
Approved by more than 40 Oil & Gas majors across the
globe.
Recipient of top Exporters Award for 2001-02 & 2002-03
from the Engineering Exports Promotion Council, India.
Construction world awardee for 2004 & 2005 as fastest
growing steel company.
Supplied pipes for World's Deepest Gas Pipeline in Gulf of
Mexico , US.
First from India :
to supply large diameter Line-pipes for off-shore
application to USA
to supply 56” X-70 Line-pipes to Iran
to produce the highest recognized Line-pipe grade i.e. X-80
to complete execution of 42” coated pipes to GAIL
Highest production recorded for a day for LSAW plant– 1,750
MT
Successful foray into large diameter pipes and niche
products – supplied the largest and heaviest 56”dia meter pipes for gas
applications
First company in the country to supply large diameter line
pipes for offshore applications in the US.
Produced the highest recognized X-80 grade pipes.
With the aid of advanced research, equipped to supply pipes
to Russia with temperature conditions below - 60 degrees.
In-house NACE accredited lab for the critical sour service
application.
Major approvals from global oil and gas majors.
Successful completion of the world's deepest gas pipeline in
the Gulf of Mexico, USA.
One of the very few approved sources of supply in the Global
market. Its high quality products have managed to attract quality conscious
global buyers such as BG, Exxon Mobil, Shell, Saudi Aramco, Gazprom, and Total
among others. On the domestic front, subject is a key supplier to India 's
largest fuel companies such as GAIL, IOCL, ONGC and BPC.
First In India...
To supply large diameter Line-pipes for offshore application
to USA.
To supply 56” X-70 Line pipes to Iran.
To produce the highest recognized Line pipe grade i.e. X-80.
To complete execution of 42” coated pipes to GAIL.
Highest production recorded in a day for LSAW plant - 1,750
MT.
Highest number of LSAW pipes produced in a month - 8,033.
HSE approvals as per ISO standards.
ISO-14001 & OHSAS-18001 (HSE) certification from LRQA
Mumbai, India.
API 5L, 5CT
All IS Standards
Approvals from Oil and Gas Majors in 2004-05 are TOTAL,
France, Saudi Aramco, Chevron, US Clough Engg, Australia, PGN, Indonesia,
MITCO, Malaysia among others.
Recognized as one of the fastest growing Steel Company by
Construction World-NICMAR (2004).
Proud recipient of top exporter's award from EEPC
(Engineering Export Promotion Council) for 2002 & 2003.
Approvals from Oil and Gas Majors in 2004-05 are TOTAL,
France, Saudi Aramco, Chevron, US Clough Engg, Australia, PGN, Indonesia,
MITCO, Malaysia among others.
In just a little more than a decade since its inception in
1985 with a small Textile unit, subject group has grown rapidly to become a
market leader in every segment that it operates viz. Terry towels, Yarns and
SAW pipes. Today, subject has an expected turnover of Rs. 45,000 Million for
the current year (of which more than Rs.35,000 Million is expected from exports),
assets worth approximately Rs. 43,000 Million, 16,000 + employees, presence in
50 countries and over 50,000 shareholders.
The market capitalization of the group stands at approx
Rs.25,000 million.
The group is expected to cross an annual turnover of RS.100000 Millions by 2008
with its forays in expansion of Rs 10000 Millions in Textiles, Rs. 12000
Millions in Plate Mill and its ambitious plans to set up a larger Power Plant
and Steel Plant..
The group is managed professionally by a team of experts drawn from
Multi-National Corporations and National Corporations of repute and is a system
– based organization working like a Multi-National, without losing the
intuitive age of Indian entrepreneurism.
The group offers tremendous learning opportunities, challenging tasks and ample
opportunities to demonstrate performance and creativity.
subject is a performance–driven organization, which has grown more than 500% in
the last 10 years.
Subject Group's interests:
|
Company |
Areas
of business |
FY-'06
revenues (Rs.
Million) |
|
Welspun India Limited |
Home Textiles - Terry Towels, Bed Sheets |
6,537 |
|
Welspun Gujarat Stahl Rohren Limited |
LSAW, Spiral and HFIW pipe manufacturing |
18,298 |
|
Welspun Syntex Limited |
Specialty Polyester Filament Yarn, Texturised |
2,671 |
|
Welspun Zucchi Textiles Limited |
Joint venture with Zucchi, Italy to manufacture Bathrobes |
236 |
|
Welspun Power & Steel |
Imports/ TNY Bars |
1,347 |
Profile: Mission
They endeavor to reach the leadership position in each
Segment / Sector of their Product / Service.
They are committed to satisfy their customers by providing
such Quality Product / Service, which gives highest value for money.
They believe that employees are their most important asset
through which they can reach the top in each category of their Product /
Service. Therefore, they will emphasize on their continuous improvement through
upgradation of relevant knowledge and training.
They commit their selves to continuous growth, so as to
fulfill the aspirations of their Customers, Employees and Shareholders.
Core Values
They endeavor to reach the leadership position in each
Segment / Sector of their Product / Service.
They are committed to satisfy their customers by providing
such Quality Product / Service, which gives highest value for money.
They believe that employees are their most important asset
through which they can reach the top in each category of their Product /
Service. Therefore, they will emphasize on their continuous improvement through
upgradation of relevant knowledge and training.
They commit their selves to continuous growth, so as to
fulfill the aspirations of their Customers, Employees and Shareholders.
Products
WGSRL strongly believes that a wide range in the
manufacturing of pipe sector is the parameter to prove its capabilities and
today, the company is proud of its range. There are only a handful of players
who can compete with the range of pipes (starting with diameter as small as 1
inch and as large as 100 inch), maintain the quality and technology that WGSRL
produce.
Proposed Joint Venture in Russia
February 26, 2007: In reference to the MOU signed for a
Joint Venture in Russia, the parties could not reach mutually agreeable terms
and conditions, hence, the proposed Joint Venture has been called off. subject
has not made any investments in Russia up till now and will therefore not carry
any liabilities on the aforesaid venture.
About
subject
The $1bn. subject Group is one of the largest Home Textile
Companies in the world. Welspun India Limited which is a part of the subject
Group started its activities in 1985 and since then has become the largest
exporter of Home Textiles in Asia and the 4th largest in the world. subject’s
plants are located in Vapi and at Anjar - Gujarat and have a capacity of 31000
MTPA. The Retail face of the company under the brand name ‘Spaces’ was
initiated in September 2003, offering holistic home textile solutions. The
initiative has since been hived off into a separate entity, Welspun Retail
Limited (WRL).
Contact
Mohan K.M
Tel.91-22-6613 5895
Fax 91-22-24908020/21
E-mail : HYPERLINK "HYPERLINK
"mailto:mohan_manikkan@welspun.com
"mailto:mohan_manikkan@welspun.com
" mohan_manikkan@welspun.com
Nayana Borthakur
Tel.91-22-6613 5724
Fax 91-22-24908020/21
E-mail : HYPERLINK "HYPERLINK
"mailto:nayana_borthakur@welspun.com
"mailto:nayana_borthakur@welspun.com
" nayana_borthakur@welspun.com
DISCLAIMER
CLAUSE:
The information in this press release has been included in
good faith and is for general purposes only. It should not be relied upon for
any specific purpose and no representation or warranty is given as regards its
accuracy or completeness.
No information in this press release shall constitute an
invitation to invest in Welspun India Limited or any of its affiliates. Neither
Welspun India Limited, nor their affiliates' officers, employees or agents
shall be liable for any loss, damage or expense arising out of any action taken
on the basis of this press release, including, without limitation, any loss of
profit, indirect, incidental or consequential loss.
The
company is in trade terms with:
Ø NIGC
Ø PGN
Ø Volstalpone
Ø Sabgitcs
Ø L
& T Mr. M. Ram Kumar (Head)
Mount Poonamallee Road, Manapakkam, PB No. 979, Chennai –
600089
Tel No. : 91-44-22492747 / 5656
Ø Gammon
India Limited- Mr. P. M. Jakkal (President )
Veer Savakar Marg, Prabhadevi, Mumbai – 400025
Tel No. 91-22-24306761/1084
Ø Punj
Llyod Limited – Mr. Atul Kumar (General
Manager )
17-18, Nehru Place, New Delhi – 110018
Tel No. : - 91-11-26200123
Ø Gujarat
State Petronet Limited
Mr. Sengupta – St. Mgr.
GSPC Bhavan, 5th Floor, Sector – 11, Gandhinagar
– 382011
Tel : 91-79-55701503
Ø Gujarat
Gas Company Limited
Mr. Nishith Dave – VP
Near Parimal Garden, Ellisbridge, Ahemadabad – 380006
Tel : 91-79-6462980
Welspun Gujarat
Announcements
· PAT growth by
over 146% to Rs. 825 millions ($20.62 mn)
· Capacity
expansion by 450,000 tons; poised to be amongst Top 3 Line pipe companies in
the World.
· Bagged Single
largest order of Rs. 18350 millions ($459 mn)
· Order book - Rs.
55300 millions ($ 1.4 bn)
Mumbai, October 15, 2007
The Board of
Directors of Welspun Gujarat Stahl Rohren Limited (Welspun) approved results
for Q2 - FY08 and new expansion plans. The Board also appreciated recently
award of excellent orders, one of them being the single largest Order by any
pipe company in India.
Q2- FY ‘08 Results
Sales up by 38% to
Rs 9276 millions ($229 mn), EBIDTA up by 95% to Rs 1556 millions ($ 39 mn) and
PAT up by 146% to Rs 825 millions ($ 20.6 mn).
|
|
Q2 – FY 08 |
Q 2 – FY 07 |
Growth % |
H 1 FY 08 |
H 1 FY 07 |
Growth % |
||||
|
|
Rs. Mn. |
% ages |
Rs. Mn. |
% ages |
Q2 -08 VsQ2-07 |
Rs. Mn. |
% ages |
Rs. Mn. |
% ages |
H1-08 Vs H1-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
9276 |
100 |
6744 |
100 |
38 |
17344 |
100 |
12104 |
100 |
43 |
|
Cost of Goods sold |
(6223) |
67 |
(4939) |
73 |
26 |
(11708) |
68 |
(8847) |
73 |
32 |
|
Total Manufacturing Expense |
(1520) |
16 |
(1010) |
15 |
50 |
(2769) |
16 |
(1788) |
15 |
55 |
|
EBITDA Operational |
1533 |
17 |
795 |
12 |
93 |
2867 |
17 |
1469 |
12 |
95 |
|
Other Income (Operational) |
22 |
0 |
5 |
0 |
343 |
30 |
0 |
8 |
0 |
274 |
|
EBITDA Reported |
1556 |
17 |
800 |
12 |
94 |
2897 |
17 |
1477 |
12 |
96 |
|
Depreciation |
(127) |
1 |
(116) |
2 |
10 |
(247) |
1 |
(232) |
2 |
7 |
|
Financial Charges |
(172) |
2 |
(176) |
3 |
(2) |
(327) |
2 |
(337) |
3 |
(3) |
|
PBT |
1256 |
14 |
508 |
8 |
147 |
2322 |
13 |
908 |
8 |
156 |
|
Taxes |
(431) |
5 |
(173) |
3 |
149 |
(803) |
5 |
(310) |
3 |
159 |
|
PAT |
825 |
9 |
335 |
5 |
146 |
1519 |
9 |
598 |
5 |
154 |
|
EPS -DILUTED |
4.54 |
-- |
2.06 |
-- |
120 |
8.35 |
-- |
3.68 |
-- |
127 |
It is note worthy that PAT in H1-08 at Rs 1519 millions ($38mn) is higher than PAT of last full year at Rs 1426 millions ($35.65 mn).
Salient Features
of the Quarter
· 43 Megawatt Lignite based power project commissioned.
· Significant Orders executed for World leading Oil and Gas majors’ viz. Exxon Mobil, Kinder Morgan, Reliance etc.
· Achieved highest quarterly production ever of 183,000 tonnes.
New Orders and Order
Book:
Welspun, rated amongst the top 3 SAW Pipe companies in the world by CLSA Asia Pacific Markets (July 2007), bagged prestigious pipeline orders worth over Rs. 20000 million ($ 500 million, taking the total order book position to over Rs. 55000 millions ($1.4 billion), one of the highest in the Industry.
Expansion Plans:
Welspun is increasing its LSAW Pipe capacity by 300,000 tons at SEZ, Gujarat, India. Besides addressing the burgeoning demands for the critical line pipes, this facility shall enable income tax benefits on the export orders. Since Welspun already possess critical equipments, this facility will be operational in just 12 months time i.e. by March 2009 and shall entail investments of Rs. 2980 millions ($75 million). Besides this, Welspun has taken up capacity expansion and de-bottlenecking of HSAW (Spiral) pipes at its existing facility at Anjar. Post completion, HSAW capacity will increase to 550,000 tons from 400,000 tons, with additional expenditure of approx 1000 millions ($25 million). Both the facilities shall be funded by mix of internal accruals and long term loans. On completion of above facilities, Welspun shall have annual capacity of 1.75 Million Tons making it one of the largest Line Pipe Companies in the World.
Status of
Plate-cum-Coil mill & U.S. project:
Welspun started trial production of its Plate-cum-Coil Mill by producing India’s widest plate of 4.5 meters. This 1.5 MTPA facility will be fully operational by the end of this financial year thus contributing significantly in FY ’09. Similarly, the implementation of 300,000 tonne project in Little Rock, Arkansas, is going as per schedule and the facility is likely to be commissioned by July 2008. Post completion of U.S. and Indian project, Welspun capacities will reach 1.6 MTPA, making it one of the largest line pipe companies in the world.
Management
Statements:
Addressing the gathering, Mr. B.K. Goenka, VC & MD said, “The first half of the year has been outstanding, they not only achieved excellent financial results but also sowed seeds for future growth by bagging prestigious orders and embarking new capacity additions. They strongly believe that they are poised to become one of the biggest and most respected one-stop-solution providers for steel pipes in the World.”
Echoing his comments, Mr. Braja Mishra, CEO & ED, Welspun said, “We are growing at a rapid pace. In our aggressive growth phase, Team Welspun has ensured that we remain focused, adhere to ‘Engineering Excellence’ and continue to delight our customers with flawless product quality and timely delivery schedules”.
About W.G.S.R.L
Subject is the Fastest Growing Company in India (Source:
Business Today) and is part of the $1.5 billion Welspun Group. The company
started its activities in 1995 and since then has supplied pipes for some of
the most prestigious projects including the World’s deepest pipeline project in
the Gulf of Mexico, USA. The manufacturing facilities incorporate the hybrid
JCO technology from Mannesmann Demag of Germany (SMS Meer). The company, since
its inception has manufactured over 6000 kms of line pipes for all critical
applications. The company has been recognized X80 grade and 56” outer diameter
line pipes in the country. W.G.S.R.L is equipped to meet the growing demand and
is in a position to meet the stringent requirements and standards of high grade
line pipes.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.27 |
|
UK Pound |
1 |
Rs.77.33 |
|
Euro |
1 |
Rs.57.51 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
45 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|