IKF Green Fuels Ltd formed as a subsidiary of IKF Technologies in 2005-06 started working in 2006 and has begun field operations in the current cropping season in 16 states in India including Chattisgarh, West Bengal, Jharkhand, Orissa, Rajasthan, Karnataka, Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Maharashtra, Gujarat, Manipur, Arunachal Pradesh, Assam, Meghalaya and Nagaland.
The parent company IKF Technologies has committed an investment of Rs 200 crore into IKF Green Fuels Ltd. Currently the company has 50,000 hectares of land under cultivation and has recently signed an MoU with the government of Madhya Pradeshwhere it would be investing Rs 30 crore in setting up a refinery. It is also seeking 2,000 hectares of wasteland for the cultivation of Jatropha in the state. The companyhas also signed an agreement with Indian Oil Corporation Ltd, R&D center, Faridabad for transferring of technology and providing technical assistance for conversion of Jatropha into biofuel.
IKF Technologies is today a Rs 180-crore company and growing. In 2004-05, when the company was taken over by Pradeep Dutta and Sunil Kumar Goel, it had a share capital base of Rs 10 crore. Over the last two years, the company has invested in putting together infrastructure and technology, which has paid off. It grew its web development, software and BPO businesses internationally, to Australia and the UK.
Read: IKF plans Rs 400-cr GDR for biofuel biz
In 2006, it set up a 31-seat BPO for Tata Teleservices. “The initial couple of years went into restructuring and settling down in the core business,” says Pankaj Garg, director at IKF Technologies, which counts domestic telcos and banks among its clients. Though the promoters realise that they are late entrants in BPO outsourcing, they are looking at new markets.
IKF has now set up offices in Germany, Brazil, Dubai and Russia, and is hoping to see growth from these markets over the next two years. The idea of getting into telecom was there since 2006 but “since it was difficult to get a licence at that point in time, it never materialised”, says Garg. But it finally got a Category ‘A’ licence for Internet Service Provider (ISP) by the Department of Telecommunications (DoT) in January. Since then, it has been busy setting up its network. “We have already spent Rs 4-5 crore, and another Rs 8-9 crore will be spent in the future on developing the network,” informs Garg. As an initial foray in telecom, the company decided to get into VoIP services, a segment, which is not too crowded. That’s how IKF Tel came into being. The company is almost on the verge of launching its VoIP services for the retail market, having already launched the same for enterprise customers.
IKF has earmarked $2-3 million for its telecom business, of which, says Garg, $1 million has already been spent over the last one year. IKF expects revenues of Rs 100 crore from its telecom business in the next three years, growing both organically and inorganically. Taking its quest for emerging technologies forward, IKF is into bio-fuels too.
According to Vishal Rawat, President, IKF Green Fuels, "The company plans to invest Rs 2,200 crore by 2015 in both plantations and refineries to become a market leader in the field and is eyeing 15-20 percent of the market share of biodiesel by then." The company has joint ventures for Jatropha cultivation in several states. In Andhra Pradesh, it has tied up with Sigma Biofuels Hyderabad and SRECKO Indhan Ltd while in Gujarat it has a JV with Avani Vermi Compost and Biofuel, Ahmedabad.
Bio Diesel Sector - Future Prospects
"We aim to have 15-20 percent share of the biodiesel market by 2015,"
-Vishal Rawat, President, IKF Green Fuels
Exerpts of interview with Vishal Rawat printed in BioSpectrum magazine.
How many refineries do you have? Any plans for expansion?
The company has a refinery at Udaipur with a capacity to process 3,000 liters of biodiesel per day for trial and demonstration purposes. We are looking at the expansion of that refinery as well as setting up of more refineries in Vidharbha, Gujarat and Meghalaya. The capacity would be dependent on the captive area.
When do you expect to start commercial production?
We expect to start it by 2011. We expect full-fledged commercial production to start by 2015-16 since by then we would have a fully-developed refining capacity and plantations. We expect the size of the industry to be close to Rs 80,000-l00,000 crore by 2017.
-Vishal Rawat, President, IKF Green Fuels
Exerpts of interview with Vishal Rawat printed in BioSpectrum magazine.
How many refineries do you have? Any plans for expansion?
The company has a refinery at Udaipur with a capacity to process 3,000 liters of biodiesel per day for trial and demonstration purposes. We are looking at the expansion of that refinery as well as setting up of more refineries in Vidharbha, Gujarat and Meghalaya. The capacity would be dependent on the captive area.
When do you expect to start commercial production?
We expect to start it by 2011. We expect full-fledged commercial production to start by 2015-16 since by then we would have a fully-developed refining capacity and plantations. We expect the size of the industry to be close to Rs 80,000-l00,000 crore by 2017.
How are you funding the plantations?
We have an agreement with HDFC bank for a credit line of Rs 20 crore on an all India basis for the farmers to undertake contract farming for IKF Green Fuels Ltd. We also have got a preliminary approval from Buldhana Urban Cooperative Credit Society (Maharashtra) for extending a credit line of Rs 50 crore for Jatropha cultivation. We are targeting 10,000 hectares in Maharashtra by the end of this year. We are also in advanced stages of talks with the Punjab National Bank and Cooperation Bank for a similar arrangement.
Are you looking at any acquisitions?
We are looking at acquiring a proprietorship concern in Rajasthan. It has around 10,000 hectares of existing plantation and an assured credit line of Rs 10 crore. The deal is almost finalized. We have also put up a proposal to Rajasthan fuel development authority for allotting 10,000 hectares which will take some time.
What is the progress made on R&D?
We already have 26 different varieties of Jatropha and we have collected the planting material from different sources. We are setting up a 200 hectares research farm in Ahamgaon in Maharashtra and looking at tie-ups with agricultural universities as well.
“The chairman of the company, Dr RP Singh, who is a former scientist at the Indian Agriculture Research Institute, led us into this field,” says Vishal Rawat, president bio-diesel at IKF Green Fuel. IKF Green Fuel is also planning to get into ethanol, solar and wind energy in the near future. For bio-diesel, though, it has signed an MoU with the government of Madhya Pradesh through which it is seeking 200 hectares of wasteland for jatropha cultivation and will also be setting up an oil extraction plant with an investment of Rs 30 crore.
It also engages in contract farming on private wasteland. “We have one refinery already at Udaipur, which can produce 3,000 litres a day but at the moment, it is being used for trial runs. We expect commercial production to start by 2010-11,” says Rawat. Commercial bio-diesel production would need a steady flow of jatropha seeds. To this effect, IKF has 10,000 hectares of jatropha under cultivation, both on leased and owned land. “By 2008-end, we hope to reach the 30,000-40,000 hectares mark,” says Rawat. Meanwhile, research is on for better seeds with agricultural universities and other institutions.
The company has been granted permission by the government of India for a GDR issue to raise Rs 500 crore. About Rs 200 crore are already been allocated for IKF Green Fuel, indicating the company’s commitment to the growing sector. It is also exploring JVs in Brazil and South Africa for plantation and extraction there. “We want to be the leader in the bio-fuels market by 2015,” says Rawat.
IKF Tech plans to grow jatropha in Africa-------
IKF Technologies, the country's first corporate jatropha refiner, has formally approached African Governments — Swaziland, Mozambique and South Africa — for permission to cultivate the plant. Armed with detailed project reports, the company has also applied for an area of 50,000 acres of wasteland in each of these countries for organised jatropha farming. Mr Mukesh Kumar Goel, a director of the company, told Business Line that official responses, however, were awaited. According to the company's estimates, the cost of acquiring the land (total 1.5 lakh acres), nursing the plants till the first fruition after 18 months, and setting up crushing facilities would be Rs 3,000 crore. In a phased manner If permissions were obtained, the purchases or acquisition of land through lease and taking up the plantation projects would be done in a phased manner over a long period of time. IKF has sought to own the land in Africa, and prefers not go in for contract farming, Mr Goel explained.
In India, it has opted for the contract-farming model in Rajasthan, where its existing refinery is located, in an area of 5,000 hectares. In Meghalaya, however, IKF cultivates on its own land.Its refinery was commissioned in March this year. Currently, it is procuring jatropha seeds from the open market since it began farming the plants in Meghalaya roughly 12 months ago.Though the first flush of seeds takes 18 months, jatropha harvests are available twice a year in the period after maturing. One hectare can accommodate roughly 2,500 plants.
The yield per tree in one harvest, according to thumb rule, is around 3.5 kg and from one kg of seeds, a little over 300 ml of bio-diesel can be had.The company has a one-year renewable technology agreement with Indian Oil Technologies Ltd, a subsidiary of Indian Oil Corporation, for perfecting mixing grade bio-diesel.
Refinery in Gujarat :
It has proposed to set up another refinery in Gujarat with a capacity of 1 lakh tonnes per annum at a cost of Rs 50 crore.
It has also sought permission for contract farming of jatropha in Gujarat and Chhattisgarh.
In Rajasthan, it has a refinery running with a capacity to produce 3,000 litres a day.
As a Market Analyst, I am strongly recommending to buy stock at CMP of around INR 3-4. It's future prospects are bright.
It also engages in contract farming on private wasteland. “We have one refinery already at Udaipur, which can produce 3,000 litres a day but at the moment, it is being used for trial runs. We expect commercial production to start by 2010-11,” says Rawat. Commercial bio-diesel production would need a steady flow of jatropha seeds. To this effect, IKF has 10,000 hectares of jatropha under cultivation, both on leased and owned land. “By 2008-end, we hope to reach the 30,000-40,000 hectares mark,” says Rawat. Meanwhile, research is on for better seeds with agricultural universities and other institutions.
The company has been granted permission by the government of India for a GDR issue to raise Rs 500 crore. About Rs 200 crore are already been allocated for IKF Green Fuel, indicating the company’s commitment to the growing sector. It is also exploring JVs in Brazil and South Africa for plantation and extraction there. “We want to be the leader in the bio-fuels market by 2015,” says Rawat.
IKF Tech plans to grow jatropha in Africa-------
IKF Technologies, the country's first corporate jatropha refiner, has formally approached African Governments — Swaziland, Mozambique and South Africa — for permission to cultivate the plant. Armed with detailed project reports, the company has also applied for an area of 50,000 acres of wasteland in each of these countries for organised jatropha farming. Mr Mukesh Kumar Goel, a director of the company, told Business Line that official responses, however, were awaited. According to the company's estimates, the cost of acquiring the land (total 1.5 lakh acres), nursing the plants till the first fruition after 18 months, and setting up crushing facilities would be Rs 3,000 crore. In a phased manner If permissions were obtained, the purchases or acquisition of land through lease and taking up the plantation projects would be done in a phased manner over a long period of time. IKF has sought to own the land in Africa, and prefers not go in for contract farming, Mr Goel explained.
In India, it has opted for the contract-farming model in Rajasthan, where its existing refinery is located, in an area of 5,000 hectares. In Meghalaya, however, IKF cultivates on its own land.Its refinery was commissioned in March this year. Currently, it is procuring jatropha seeds from the open market since it began farming the plants in Meghalaya roughly 12 months ago.Though the first flush of seeds takes 18 months, jatropha harvests are available twice a year in the period after maturing. One hectare can accommodate roughly 2,500 plants.
The yield per tree in one harvest, according to thumb rule, is around 3.5 kg and from one kg of seeds, a little over 300 ml of bio-diesel can be had.The company has a one-year renewable technology agreement with Indian Oil Technologies Ltd, a subsidiary of Indian Oil Corporation, for perfecting mixing grade bio-diesel.
Refinery in Gujarat :
It has proposed to set up another refinery in Gujarat with a capacity of 1 lakh tonnes per annum at a cost of Rs 50 crore.
It has also sought permission for contract farming of jatropha in Gujarat and Chhattisgarh.
In Rajasthan, it has a refinery running with a capacity to produce 3,000 litres a day.
As a Market Analyst, I am strongly recommending to buy stock at CMP of around INR 3-4. It's future prospects are bright.
Stock price could touch arround INR 50+ in 2012 and may be 200 in future but buy at your own risk. Do your own analysis and take a call. I would say one can take bet on this counter depending upon their risk appetite.
IKF Technologies announced today that it has bagged contract from Metlife India Insurance Company. 3- 4 days back, it also announced that it has got a contract from Aircel.
ReplyDeleteIKF Tech wins BPO contract from Metlife
The contract work includes providing telecalling activities i.e. BPO and call centre services relating to insurance segment for PAN eastern region initially for a period of 12 months.
The contract will further enhance the revenue of the company.
IKF Tech bags BPO contract from Aircel
The contract work includes providing BPO and call centre services in Eastern region of India which will include Calcutta, the rest of Bengal, North East, Bihar and Orissa and with a capacity of 1,000 work stations.
IKF Technologies provides telecom, IT software development, business process outsourcing (BPO) and application maintenance services.
Recently, IKF Technologies reported rise of 92.55% in consolidated net profit on y-o-y basis to Rs 100.69 million, while total income increased 27.06% y-o-y basis to Rs 579.37 million for the quarter ended March 2010.
Looking at all these developments, future outlook for this small cap stock looks good. A few months back, they had announced the plan to hire 1500 employees. I believe this could become a multibagger stock in long run. Though, lately I did not get to hear anything about their Bio fuel and Internet telecom initiatives. I visited their websites and both the website are down.