NEW DELHI, Aug 7: Hindustan Sanitaryware & Industries Limited (HSI), a part of the Calcutta-based Somany Group and a market leader in the sanitary ware segment, has got an in-principle approval to float a $30 million (Rs 105 crore) global depository receipt (GDR) issue.

The company has already lined up $15 million plans to float the issue in October. The balance is expected to be tied-up by the end of this month.The company had in February 1997, got an approval to float a $25 million GDR issue. The company, however, did not avail the approval and applied afresh for a $30 million GDR issue.

The issue is to part-finance the company's ambitious Rs 270-crore expansion programme in its sanitary ware and glass container businesses over the next four years.HSI joint managing director Sandip Somany said that having sensed the opportunity in the last few years, the company is expanding to consolidate its position.

"The company which currently enjoys a 34 per cent share of the sanitary ware market expects to increase its market share to 40 per cent after the expansion", he added. HSI also expects to raise its current market share of 28 per cent in southern India after the expansion.Another Group company and a leading player in the tiles market, SPL Ltd is also embarking on a over Rs 110 crore expansion-cum-modernisation exercise. The company plans to double its installed capacity from 105,000 mt to 210,000 mt by year 2001-02. SPL managing director Shreekant Somany said the company is also considering diversifying into high-value added products in the ceramics industry.

"Though we are exploring many options, we do not intend moving out of the core competency areas", he added.He said SPL would be sourcing a major part of the investment through internal accruals, with the balance being tied-up through the debt route.

HSI is investing over Rs 97 crore in its sanitary ware division in a phased manner to double its existing installed capacity of 1.8 million pcs per annum to over four million pcs. It will invest Rs 174 crore to more than double its existing installed capacity of glass container from 64,000 tpa to 1,58,000 tpa.

Apart from the GDR issue, the remaining part of the finance for the expansion is expected to be sourced through debt (Rs 40 crore) and internal accruals (Rs 127 crore). u

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.