Prakash C. Kanugo, Chairman & Managing Director, Prakash Steelage Limited, started his business career as a trader in stainless steel sheets, coils and plates in the year 1978. He later established Prakash Steelage Limited in the year 1991. He looks after the entire management of the Company more particularly the domestic procurement of raw material.He is the past president and an active member of various organizations like Bharat Vikas Parishad and Marine Lines Junior Chambers. He is presently the president of Mahavir International, Mumbai. Kanugo is also the vice president of JITO, Mumbai zone (FCP).
Prakash Steelage Limited is engaged in the manufacturing of seamless & welded stainless steel Pipes, Tubes and U-tubes. The customer base includes a diverse set of industries including Oil & Gas, Power, Pharmaceutical, Petrochemical, Sugar, Dairy, Automobile and the products have found wide acceptance in the markets of North America, South East Asia, Africa, Middle-East and Europe. It is now planning to boost our export in South East Asia and other Western countries by participating in trade fairs and exhibitions all over the World.In Domestic market, the company enjoys credible relationship with Bharat Heavy Electrical Ltd., Essar Heavy Engineering Services Ltd., Siemens Ltd., Profins Ltd (UK), Sole A/S (Eggedal).
Speaking with Yash Ved of IIFL, Prakash C. Kanugo says, "The domestic demand for seamless steel pipes and tubes is 26,600 tons. This is expected to go up to 60,000 tons by 2015-16."
Brief us about your IPO plans?
Prakash Steelage Ltd., the company engaged in the manufacturing of seamless and welded stainless steel pipes, has fixed a price band for its upcoming initial public offering (IPO) at Rs100 and Rs110 per share.
The IPO will open on 5th August for all bidders and will close on 9th August, for QIB bidders and on August 10, for non-QIB bidders. The company is planning to raise Rs750mn via the IPO.
Brief us about your expansion plans?
The company is planning to raise capital to part finance its backward integration cum expansion plan at its existing manufacturing facilities at Umbergaon, Gujarat for producing Seamless and Welded Stainless Steel Pipes, Tubes and U Tubes.
Having set up its first plant at Silvassa in the year 1996 with a capacity of 4000 MT PA, the company expanded the capacity by setting up another plant at Umbergoan in Gujarat.
At present, it has a total capacity of 15600 MTPA which is going to be expanded further to 19000 MTPA during the year 2010-11.
The company has new products in the pipeline and plans to foray into Duplex, Super Dupex and Super Austenitic Pipes/tubes.
How do you see the demand for Stainless Steel Pipes and Tubes?
The domestic demand for seamless steel pipes and tubes is 26,600 tons. This is expected to go up to 60,000 tons by 2015-16. The major players in the domestic market like Ratnamani Metals, Suraj Stainless and Prakash Steelage hold good market share in the Stainless Steel Pipes and Tubes.
Who are your competitors?
We face competition in overseas markets from companies such as TPS (Germany), Tubacex (Spain), Speciality Steels (USA) and Sandvick (Sweden).
Brief us about your capex plan?
We have planned a capex of Rs480mn.
Which are the countries you export to?
The company exports its products to countries like USA, UK, UAE, South Africa, Belgium, Canada, Columbia, Denmark, Egypt, France, Germany, Iran, Italy, Jordan, Mauritus, Mexico, Netherland, Norway, Portugal, Saudi Arabia, Singapore, Spain, Switzerland and Turkey.
About 85% of our total revenues come from the domestic market and 15% from the overseas markets.
The management expects CAGR of over 30% during the next five years.
What will be the promoter holding after IPO?
Post IPO, our promoter holding will be 65%.
What kind of hiring are you looking at?
We are planning to add 25-30% more employees in FY11. Currently we have about 450 employees.
Brief us about your financials?
The company clocked a turnover of Rs4.37bn for the year ended 31st March, 2010 with EBITDA of Rs451.4mn and profit after tax of Rs178.2mn.