Agrochemical company Heranba Industries, which is planning to enter the capital markets soon, is expecting Rs 1,150-1,200 crore revenue in 2020-21 as the economic activities are improving gradually after the havoc caused by the pandemic, a top company executive has said.
Being an agrochemical company, we were not affected much by the disruptions caused by the pandemic. In 2019-20, we clocked a revenue of Rs 950 crore and this year during the first half we had garnered a revenue of Rs 618 crore.
“And if the situation improves further, the management is confident on achieving the revenue target of over Rs 600 crore in the last two quarters to reach overall Rs 1,150-1,200 crore in FY21,” Heranba Industries Chairman Sadashiv Shetty told PTI in a virtual interaction.
Further, he said the company is planning a brown field expansion at its Sarigam unit and will also develop a green field project at Saykha Gujarat Industrial Development Corporation (GIDC) near Ankleshwar in Gujarat.
A green field project is a completely new project, whereas in a brown field project work is done on a land with some prior work. ”The capex for both of these projects is around Rs 40-50 crore. The funding for these expansions will be done through internal accruals,” Shetty added.
Currently, Heranba Industries has three manufacturing units, two in Vapi producing intermediates and technicals and one in Sarigam producing formulations, Shetty added.
When asked about the impact of COVID-19 on the manufacturing, he said production at the company’s manufacturing facilities at Vapi and Sarigam were shut down temporarily for some days in the beginning of the lockdown.
”During the initial stages of the lockdown we faced limited availability of labour, there were supply chain constraints and logistical problems. However, as agrochemicals was categoried as essential item we were back to manufacturing without any problems,” he added.
Further, the company also exports to over 60 countries including China, Iran, Vietnam, Thailand, Turkey among others. Shetty said, going forward the company is planning to strengthen its existing export markets and explore new highly regulated ones like Europe and Latin American countries.
”As 50 per cent of our business is exports, our focus right now is strengthening our existing markets. We are also exploring to enter into the niche markets like Europe and South American countries. These are highly regulated markets,” he said.
The company has completed its registration process and is expecting to enter Europe during this financial year, and Latin America by 2022-23, he added. Meanwhile, the company’s plan to enter capital markets is underway and it filed the draft red herring prospectus (DRHP) a few months ago.
The company has received approvals from NSE and BSE, and the Securities and Exchange Board of India(SEBI) approval is expected in the coming days, Shetty said.
At the moment, the management is also in talks with a few key investors to check potential interest in the company, he stated. ”We are hoping to raise close to Rs 700 crore from the capital markets, which will mainly be used for working capital and other expenses,” he added