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“We were all set to come out with the IPO last year. But the stock market crash made us change our mi-nds,” Ayodhya Rami Reddy, founder chairman, said. “With the sentiment in the market improving, we are confident of going public this financial year.”
Ramky Infrastructure would be using the money to fund its existing projects. The company, at present, has an order-book of Rs 7,000 crore. It sees this figure going up to about Rs 10,000 crore to Rs 12,000 crore by the end of this fiscal. Reddy agrees that the amount may not be enough to satisfy the funding needs of the new projects.
“There may be a shortfall in funds for some of the projects. In such a case, we may dilute our stake in some of the special purpose vehicles that the company is part of and use that money to make up the deficit,” he explains.
Ramky Infrastructure has a contingency plan in place in case the planned IPO doesn’t fructify. The co-mpany is in talks with a nu-mber of private equity players to get the necessary fu-nding if its listing plans get stalled again.
“We always have the private equity option if things don’t work out. We have received PE funding in the past,” Reddy says. “Finally it boils down to the cost of funds.”
The Ramky group had received Rs 200 crore from Standard Chartered and IL&FS for its environment business. IL&FS had also put in Rs 300 crore in the real estate arm of the conglomerate.
The group is targeting a turnover of Rs 3,500 crore to Rs 4,000 crore for FY10, out of which, about Rs 2,300 crore is expected to be contributed by Ramky Infrastructure. Reddy has ambitious plans for the group in the renewable energy sector. There is talk of setting up a photovoltaic cell manufacturing facility in Hyderabad, though he refrains from giving a timeframe for the project.
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