PUNE, June 9: The Rs 1,500-crore Kalyani group, which has already raised US $34 million through external commercial borrowing (ECB) for some of its group companies, is seeking to raise more.

It is planning to raise $3 million for automotive axles and a further $25 million for its flagship Bharat Forge Ltd (BFL) group vice-chairman Baba Kalyani said.

Bharat Forge , which has already raised $25 million, is allowed to raise another $25 million under the provision that a corporate can raise twice the amount of its exports. This will be used to restructure its existing loan portfolio, Kalyani said.

The group, which is expanding capacities in all units, has ruled out tapping the capital market. Kalyani said the high cost of equity, which, with dividend tax, would cost the company up to 30 per cent in interest, makes debt a cheaper alternative.

For the Kalyani group's longer-term debt up to seven years,external commercial borrowing would cost them between 100 to 200 basis points over Libor, amounting to 7.7 to 8.5 per cent in dollars. Additionally, with the group's focus on exports, the borrowings would be hedged against fluctuations in foreign exchange rates.

He denied the group's reluctance to tap the capital market was due to the fact that its last issue, Kalyani Seamless, did not fare well.

Kalyani Brakes Ltd, a joint venture between Nabco of Japan, Robert Bosch of Germany and Kalyani's, has already raised, $6 million while Kalyani Steels Ltd (KSL) has raised $3 million.

The group vice-chairman said all group companies generated Rs 10 crore in 1996-97 internally.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.