EESL : Put it off indefinitely !

Business Line ( 18 Aug ) carries following news :

EESL puts off IPO again ; now in FY 20   

Highlights :

·         In Jan 2018 , its paid up capital was Rs 460 cr

·         Revenue : Rs 1200 cr in 2016-17  /  Rs 1400 cr in 2017-18

·         Revenue target :  Rs 3000 cr in 2018-19

·         Capital Expenditure proposed for 2018-19  :  Rs 6,000 cr

·         Amount to be raised through DEBT  :  Rs 4,800 cr ( 80 % of Rs 6,000 cr )

·         Comprising : Domestic Borrowing of Rs 2,000 cr / Rs 2,000 cr of Bonds

I suppose , EESL needs that Rs 6,000 cr of Capital Expenditure to “ BUY “ , those ELECTRIC CARS ( each priced at Rs 11 lakhs ) from TATA and M&M

But , if it were to “ LEASE “ those cars ( from TATA / M&M ) , instead of “ BUYING “ , then I suppose EESL would NOT need that CAPITAL EXPENDITURE !

If anything , it might have a monthly “ LEASE INCOME “ ( through sub-leasing of those cars to various Govt Depts ) which would be far in excess of the “ LEASE RENT “ that it would pay to TATA / M&M  !

A positive “ Working Capital “  !

I , once again urge Shri Saurabh Kumarji , to go through my suggestions in following emails :

EESL : Grab this chance !  [  01  Aug  2018  ]

You may be able to :

·         Avoid market borrowing of Rs 4800 cr at 12 % interest

·         Service additional Equity

·         Avoid IPO

19  Aug  2018

www.hemenparekh.in / blogs