The turning level got here within the second half of 2020 after we enhanced operational effectivity, says Chairman & Managing Director Aditya Jalodia.
| Photo Credit: Special Arrangement
Having scripted a turnaround following a company debt restructuring train (CDR), Jai Balaji Industries Ltd., an iron and metal producer, is now focusing on producing in demand DI pipes, high grade ferro-alloys, TMT bars, value rationalisation and capability growth by way of inner sources to develop its enterprise mentioned its Chairman & Managing Director Aditya Jalodia in an interview.
Owing to losses the corporate had become a non performing asset (NPA). It was among the many 22 bancrupt companies which had been named by the Reserve Bank of India (RBI) in its second checklist launched in 2017 asking banks to resolve the debt although CDR or ship to NCLT by way of the Insolvency & Bankruptcy Code (IBC) course of.
“The turning point came in the second half of 2020 when we enhanced operational efficiency. By March 2023, the fruits were visible through a strong balance sheet and the company will continue to do well in the future as well,” he mentioned.
The stability sheet was cleaned up by way of refinancing of loans and infusion of ₹250 crore by the promoters who put their pores and skin within the sport to facilitate the turnaround.
The key ingredient of the turnaround has been altering enterprise technique by focusing on manufacturing ductile iron (DI) pipes used for water provide that are procured in large amount for the federal government sponsored Jal Jeevan Mission.
“This segment is expected to grow at 13-15% CAGR over the near future. Currently we are supplying such pipes all over the country. Now we are planning to increase production of such pipes from 3 lakh tonnes per annum to 6.6 lakh tonnes per annum in 12 to 18 months,” Mr. Jalodia mentioned.
He mentioned the corporate would additionally improve the manufacturing of ferro-alloys from 30,000 tonnes every year to 72,000 tonnes within the subsequent 12 months .
Both these expansions would value ₹500 crore and can be met by way of inner accruals, Mr. Jalodia mentioned including the corporate had already invested ₹300 crore previously years.
He mentioned the corporate, having repaid a debt of ₹1,200 core, now has a debt of ₹560 crore from Tata Capital which refinanced the high value loans and offered some working capital.
Commenting on the turnaround when many metal firms had to be referred to the NCLT, the CMD mentioned, “The key difference was that our entire management team was wholeheartedly committed to reduce cost and ensure a turnaround.”
“Now, we have been making profit. With our debt equity ratio down at 0.66%, we are aiming to become a zero net debt company soon,” Mr. Jalodia added.
