Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (8840)	10/23/1999 4:43:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

Siemens India - An Attractive offer Siemens India prithvi.siemens.co.in Shareholding Pattern prithvi.siemens.co.in October 11, 1999 Siemens has come out with a rights issue priced at Rs 200 in the ratio of one share for every four shares held, aggregating to Rs 141.99 crore. The objects of the issue are to redeem 10.50 per cent cumulative redeemable preference shares with a face value of Rs 107 crore, alongwith redemption premium of Rs 17 crore. This apart, Rs 17 crore will be utilised to repay debt. As on March 31, 1999, the company had loan funds of Rs 217.70 crore which are in the nature of secured and unsecured loans. A wholly owned subsidiary of Siemens, Germany with a 51 per cent equity stake, Siemens is in the business of automation, medical engineering, power generation, power transmission and distribution systems, switchgear and telecommunication systems. Siemens offers a diversified range of products and services through 11 business divisions, namely Power Generation, Power Transmission and Distribution Systems, Industrial Projects, Standard Products, Automation and Power Electronics, Low Voltage Distribution Systems, Medical Engineering, Railway and Transportation Systems, Automotive, Components, and Private Communication Systems Division. The company manufactures and markets a wide spectrum of products in the electrical and electronic industry. It also undertakes turnkey projects in the area of electrification, process automation and power generation. These products are sold under the brand name "Siemens". The company has an extensive marketing network in India including 12 sales offices and additional 18 representative sales offices. It has also appointed 300 dealers for marketing it wide range of electrical protection equipment and more than 50 system houses operating in the area of industrial electronics and products. Siemens also undertakes large scale projects in the area of distribution control systems, electrification networks, network automation and power plant engineering on its own. These projects involve detailed engineering solutions and automation systems designing at various stages of bidding and implementation. These projects usually have long lead time and are spread over two to three years. The project activities are also supported by a strong team of field service engineers who are involved in imple-mentation of the systems and equipments and also for servicing at clients sites. The engineering major has reported Rs 1.82 crore net profit for the third quarter ended June 1999, as against Rs 15.26 crore loss in the corresponding quarter last year. The company has reduced its losses for the nine months ended June 30 to Rs 3.82 crore from Rs 56.02 crore in the corresponding period last year. The improved performance of the company was a reflection of the re-structuring activities undertaken by it. As regards the turnaround, the company has floated four voluntary retirement schemes-floated over the last three years-and slashed flab by 2000 employees. Siemens has also undertaken a number of large-scale internal restructuring to put the company on a par with its competitors. The focus of the restruc-turing was to make an elaborate product rationalization exercise aimed at controlling costs and measures including an extensive sales promotion programme at the operator, dealer and customer end and an overhaul of the entire sales structure, and amplified focus on human resource development.The objective of the elaborate internal restructuring was also to redefine the company's financial parameters to bring more clarity to its performance. New orders valued at Rs 629.2 cr were received in the first half compared to Rs 429 cr in the corresponding previous first half. The growth drivers were primarily the power transmission and distribution projects and medical engineering business of the company. The company expects to make a complete turnaround by the end of the current accounting period ended Sep.'99. For the year ending September 1999, the company has forecast a net profit of Rs 3 crore on a sales of Rs 1,000 crore. The equity will stand enhanced to Rs 35.49 crore. The rights offer will somewhat have a dampening effect on the stock valuation unless the turnaround witnessed is consolidated. In the short run though offcourse the scrip has displayed sharp rising movements backed by volumes. It is currently traded at Rs 388, the offer price is at a discount of 43 per cent to the market price. Nevertheless investment can be considered. (Source: The FPJ - Business Journal)