The shares of mining company Sandur Manganese and Iron Ore have almost doubled in the last 6 months. This company has recently announced the purchase of 80% stake in Arjas Steel Private Limited. Sandur Manganese said that approval for business acquisition has been received from the board. Regarding this, Dainik Bhaskar talked to Bahirji A Ghorpade, Managing Director of Sandur Manganese. He said that this deal will provide good growth to the company. By combining the two companies, the consolidated revenue will almost double. Shareholders will also get good value. Question: First of all, tell us about your company, when and how was it started? Answer: Our company started in 1954, which is almost 70 years old. We have been mining manganese and iron since the beginning. The company was listed on the Bombay Stock Exchange (BSE) in the 1960s. Our mines are in the Vermillion region of Karnataka. We are also increasing our production. We are increasing iron production from 1.6 million to 4.5 million tonnes. At the same time, more than half a million tonnes of manganese is being produced. He said that we are the second largest manganese and iron miner in India. Question: How was the Arjas Steel deal finalized? Any special reason for acquiring it? Answer: Right now we are going to acquire Arjas Steel Private Limited. This company is in the specialties steel segment and has two plants. The main plant is in Andhra Pradesh and the second plant is in Punjab. Their products mostly go to the automotive industry. Apart from this, products have also been launched in other industries including railways, renewables, defense and agriculture. Both the plants have well established customers. We are going to buy its stake from private equity firm ADV Partners. He has taken good care of the plant and has set a vision and grown it well. Along with this, a professional management team has also been kept. When this proposal came to us, we saw an opportunity for inorganic growth in it. That’s why businesses are doing acquisitions. Question: How will you make fund arrangements for the deal? That is, how much will internal accruals be raised and by how much? Answer: The enterprise value of the company is Rs 3000 crore. For this deal, one fourth part will be funded through internal accruals and the rest will come through loan. Question: Sandur shares have given 100% return in 6 months, how much return can investors get in future? Answer: Our shareholders know that our company has given very good returns. In future, the company’s shares may see a rise of 15% on a consolidated basis.
