NCS Gayatri to tap market

MUMBAI, Nov 16: NCS Gayatri Sugars Ltd is coming out with a public issue of 62,50,000 equity shares of Rs 10 each at par aggregating Rs 6.25 crore to part finance a sugar project to manufacture white crystal sugar with licensed capacity of 25000 TCD at a cost of Rs 58 crore. The project located at Nizamabad district, Andhra Pradesh is promoted by T Subbarami Reddy, the sitting Member of Parliament from AP.

While the promoters have been engaged in construction business for several years, the issue document says they do not have any prior experience in the sugar industry. The total cost of the project appraised by the IDBI financed through equity capital of Rs 25 crore and term loan components of Rs 33 crore – Rs 20 crore from IDBI and Rs 13 crore from IFCI. This is in spite of the company having institutional overdues to the extent of Rs 2.23 crore on account of interest as on September 15, 1997.

Starchem Industries Ltd, another company promoted by the same promoters, too has an institutional overdues to the extent of Rs 4.38 crore on interest and Rs 92 lakh on account of principal as on September 24, 1997.

The company has sought re-schedulement of overdue loans from the banks and funding of the overdue interest. The Industrial Development Bank of India, the lead institution has already sanctioned the reschedulement.