GACL board approves two major capex plans

The board of directors of Gujarat Alkalies and Chemicals Limited (GACL) has given approval to two major capex plans that include establishment of new capacity of hydrazine hydrate and capacity expansion of its existing caustic soda plant. 

The first plan includes establishment of 10,000 MTA (80%) hydrazine hydrate project through EPCM mode at revised estimated cost of Rs 405.50 crore, including interest during construction. The company is not producing hydrazine hydrate at present as there is no existing capacity of the same. The project will go on stream in 24 months from the date of commencement. The announcement of this project was made in mid 2016.

Post the implementation, the company expects to clock revenue of Rs 300 crore from it. 

The second plan includes the expansion of its existing caustic soda plant of Dahej complex from 785 MTPD to 1,200 MTPD and also installation of 65 MW of coal-based power plant at Dahej at an estimated aggregate cost of Rs.825 crore. The project will go on stream in 36 months from the date of commencement. 

This project will help the company earn revenue of Rs 480 crore. 

Both the projects would be funded through internal accruals or from the surplus generated from internal operations. The additional funds, if required, would be met from external commercial borrowings (ECBs) or rupee term loans. 

On Thursday, the stock of GACL closed at Rs 540.55. On Friday, it opened at Rs 543.10 and surged by 1.6 per cent to make intra-day high of Rs 549.10. It later got closed at Rs 541.65.