Dredging Corporation looks to increase margins
Set to augment fleet with new dredgers; Raising Rs 500 cr through tax-free bondsA Dredging Corporation of...
Set to augment fleet with new dredgers; Raising Rs 500 cr through tax-free bondsA Dredging Corporation of India (DCI), a government entity, which is raising `500 crore through tax-free bonds, says it margins will improve from next fiscal as it's in the processing of replacing three old dredgers with new ones. The Visakhapatnam-based company which enjoys more than 60 per cent market share in the country's dredging activity generated `504.58 crores in revenues in the fiscal year FY-12, and a net profit of `13.18 crore, down from `39.51 crore in the previous year. "Our net profit in the current fiscal will remain same as in the last fiscal. We expect margins to improve next fiscal as we are in the processing of acquiring three new dredgers," P V Raman Murthy, Director (Finance), DCI, told media here. The first of the three new dredgers had already joined its fleet of 15 dredgers and the second one will be delivered in June this year. DCI funded these two dredgers through external commercial borrowings (ECBs), while the proceeds from the tax-free bond issue will be used to acquire the third one which will join the fleet early 2014. "Acquiring a new dredger is an expensive proposition as each one costs around `550 crore," said Capt. D K Mohanty, Chairman and Managing Director, DCI. The tax-free bond issue of the company which opened for subscription on March 7 will close on March 15. The face value of the bonds is `1,000 crore and they offer an annual coupon rate of 6.97 per cent for retail investors. The tenure of the bonds is 10 years. The issue have been rated 'BWR AA+ (SO) (Outlook: Stable)' by Brickwork and 'CARE AA (Double A)' by CARE.