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Wednesday, December 9, 2009

Indo Borax Home Unit Sees 80 Mn Rupees Profit in2 Yrs

Indo Borax & Chemicals Ltd., a supplier of raw material to drugmakers, expects its housing unit to get pretax income of 80 million rupees ($1.7 million) within two years from a Mumbai project, Vice Chairman Sajal Jain said.

Low borrowing costs are attracting home buyers in the world’s second-fastest growing major economy, where there’s a shortage of 24.7 million housing units. Indo Borax this week said it’s expanding into home building and large projects, seeking to benefit from government spending on roads, airports and power plants needed to drive the economic expansion.

“Once we complete a few projects, we will unlock the value and take it public,” Jain said in a telephone interview today.

A 32,000 square-foot housing project in the north-western Mumbai suburb of Santa Cruz on land bought for 160 million rupees should be completed within two years, delivering the pretax profit, Jain said. Another 100 acre plot bought in the south-western state of Goa will be used to develop a township in Mopa, nearby an airport being planned by the region’s government.

Indo Borax had income before tax of 78.7 million rupees in the year through March 31, a 7.6 percent increase from a year earlier. The shares have climbed 94 percent this year, compared with a 77 percent advance in the Bombay Stock Exchange benchmark Sensitive index.

Indo Borax’s housing unit may sell its shares in an initial public offering in “about three years” as it would have completed two to three projects by then, Jain said.

Separately, a boron mine in Argentina bought by Indo Borax for about $2 million may deliver about $225 million of the raw material used to make borax, Jain said. The company plans to use the product in its plant in Madhya Pradesh, as well as sell it in Brazil, he said. Boron isn’t found in India, Jain said.

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