GMR Industries Ltd (GIL), the agri business arm of the infrastructure major GMR Group, plans to invest Rs 8 billion ($200 million) in new projects.
The company, which is mainly into sugar production with allied products like co-generation and distillery, plans Rs 2.5 billion rights issue by end of June to part fund its projects.
R. Ramakrishnan, the new managing director of the company, said that the investments include Rs 4.5 billion for acquisition of a sugar plant in Raibagh and expansion of another in Ramdurg, both in Karnataka.
The board of directors of GIL on Tuesday met to approve the financial results for the quarter and the financial year ended March 31, 2008.
The 3,500 TCD (Tonnes Crushed Per Day) greenfield sugar complex in Haliyal, Karnataka, built at Rs 3.4 billion has already commissioned.
The 2,500 TCD semi finished co-operative sugar plant in Ramdurg, which the company has been taken over on a 25 year lease, is expected to start operations in October. The company has invested Rs 400 million in the first phase.
The board approved acquisition of Alagwadi Brajeswar Sugars Private Ltd in Raibhagh, which holds the license for a 2,500 TCD sugar plant. The plant will start operations from 2010 crushing season.
He said the company's profit during the year has come down due to depressed prices. The sales were down by 140,000 quintals due to non-availability of sugarcane.
However, the company ended the fourth quarter on a very optimistic note. It reported a net profit of Rs 144 million for the fourth quarter ended March 31, 2008, as compared with a net loss of Rs 65 million incurred during the same period last year.
Turnover for the quarter increased to Rs 560 million from Rs 510 million during the same period last year.
"It is a challenging time for all sugar companies in India due to depressed prices. The farmers are also switching over to other crops due to low minimum support price for sugarcane," he said.
Ramakrishnan said the company was trying to improve the performance through effective cost measures and reduced expenditure. Increase in income and sugar prices by 10 to 15 percent besides also helped the company to post profit.