Brassco Estates Private Limited (Brassco) is an associate company of Amtek Auto Limited (19% shareholding). Promoter, Mr. Arvind Dham & family hold balance stake in the company.
Brassco is engaged in manufacturing, fabrication, distribution and imports & exports of automotive engine parts and spare parts of tractors, automobiles, locomotives, etc. It undertakes design, manufacturing, marketing and maintenance of components and machinery for automobiles, aircraft etc including devices for transport machinery. It also provides services for setting up integrated forging manufacturing and marketing facilities.
For the period ended May 31, 2010, Brassco posted a PAT of 0.46 crore on net sales of ` 1.22 crore as against a PAT of ` 0.22 crore on net sales of 0.59 crore for the year ending March 31,2009. (For summary financials of Brassco, please refer Annexure I)
Brassco proposes to issue secured NCDs for ` 440 Crore and utilize the proceeds for investment in the Amtek Group Companies. Amtek Auto Ltd., the flagship Company of the Group will provide an unconditional and irrevocable undertaking to purchase the shares acquired out of the issue proceeds.
The rating for the said NCDs factors, inter alia, the Amtek Auto’s established position in the auto component segment, integrated global operations, diverse product profile and healthy financial profile. The rating is however tempered by the company’s presence in the highly competitive and fragmented auto component industry and concentration of revenues from the automobile segment.