LIC, four banks to invest Rs 161 cr in Videocon: Venugopal Dhoot

ET Now spoke to Venugopal Dhoot, CMD, Videocon Industries, on the company's expansion and stake sale plans. (Watch)

ET Now: There is lot of speculative talk about Videocon Industries. What about the investment by LIC and four other banks in Videocon? Would it be to the tune of RS 160 crore or would there be plans to give them more stake as well?

Venugopal Dhoot: Yes, they have agreed to take Rs 161 crore as preferential offer but that is a very small issue. As you know Videocon has been doing extraordinarily well in oil and power. In energy sector, we are implementing three power projects.

One is at Pipavav where financial closure has already been done for 1200 MW power project and the order is with BHEL. The power project is in stream and it is extremely profitable. The second power project is in Chhattishgarh, where we have acquired the land. So this power project has also taken shape.

Third power project in Kolkata for 1200 MW. The land is in process of being acquired and so that power project we will be doing very well. All these power projects are subsidiary of VIL, so it’s a good going for Videocon Industries Ltd.

The second point is that in oil, we have made a large discovery in Brazil. Very good oil has been found and the oil price is around $75. It makes good sense for us. The same is the case for Mozambique- a large quantity of gas has been found. In Indonesia also we have got the oil so in global front, oil business has been doing very well. So, total energy business of Videocon is doing well.

As you already know, in the consumer durable space we are already No 1 and that’s not a problem. In telecommunication industry too we have got a telecom indulgence, we have a plan of pan India programme and have got very good customers.

Vidoecon brand is well known across India, and that’s why this brand strength is giving us good customers in telecom brand also. So, all infrastructure projects have been very good and that’s why there are bankers who are interested in a stake.


ET Now: Is it true that you are in talks with a fairly large industrial group for a part or a full stake sale or a joint venture in the telecom business?

Well we have already said that there are lot of proposals for budgeting out 26% stake in a foreign companies. Two American companies, two European companies, one Japanese company, and one Korean company wanted to have their stake in India in telecommunications. We have welcomed them, they should get 26% equity in our company by diluting, putting some money etc so that we will have a capital. We have already tied up Rs 7000 crore from State Bank of India and total deposit of Rs 14,000 crore on stream. So telecom has been also doing extremely well. So these are infrastructure projects Videocon has been involved in and we are sure that in time to come Videocon will perform.

ET Now: Are you in talks with one of the largest industrial houses in India for the stake sale in the telecom business?

Well that is your guess. I cannot say anything on that because that is all those things will be very premature to talk about.

ET Now: Are you saying that you are not in talks with such a group?

I cannot say anything on this because in business, some levels of secrecy has to be maintained and there are always incidents that if secrecy is not maintained the deal doesn’t go through.

ET Now: You have done the first bit of allotment to LIC and four other banks. You said that this is a very small allotment and more is on its way. Is there a ballpark estimate that you have that as a promoter you want to dilute your stake up to a particular percentage and you will look forward to more such preferential allotments to global or Indian investment terms?

Yes, at appropriate price we have got approval from our AGM and Board for placing Rs 1000 crore worth of our shares with global or Indian financial distribution and at appropriate price, when the share will have a strength, in 6 month or a year’s time, it will be placed. So the company will have further money and company can have money by diluting our shares in power projects and also in telecommunication etc.

ET Now: What would the appropriate price be in your eyes? Is there a sense that you have that you would probably dilute at a particular level which is x percentage higher than the current market price?

That time will decide, I cannot predict but definitely the company will be diluting stake to the good buyers like banks, financial institution and FIIs. We have got our approval from Board of Directors and AGM and as when company requires money that could be encashed.