Murugappa Group to take a call on foray into banking sector

Diversified business conglomerate Murugappa Group would take a call on its foray into banking services sector over the next couple of months, a top company official said on Friday.

“After the guidelines came from the RBI, there were some issues relating to NOHC (Non-Operative Holding Company) and other regulations. We have actually sought some clarifications from the RBI,” Murugappa Group Executive Chairman A Vellayan told reporters here.

Asked whether his company was open to foray into the banking sector, he said: “We are waiting for the final clarity before we take a call. Maybe in couple of months, we will take a call.”

Commenting about the annual performance of the company, he termed the period 2012-13 was a “mixed year” in the backdrop of “deficient” monsoon and “steep” increase in input costs. “I think most of the year felt the impact of economic slowdown. Our engineering and agri-businesses were clearly impacted. The group invested capital expenditure of Rs 1,750 crore. Major acquisitions during the year were Shanthi Gears for Rs 464 crore, Liberty for about Rs 350 crore,” he said.

Noting that the company’s overall turnover grew by one per cent to Rs 22,466 crore with a profit after tax of Rs 1,313 crore, he said, “we also see this year, as a year of consolidation in a difficult phase”.

To an another query, he said the company would make around Rs 450 crore as of capital expenditure plans for this fiscal which would be the lowest capex in the last five-six years, but it is also realistically linked to ultimate demand which we cannot be sitting on large unutilised capacity.

“I think, we will wait and watch for the first six months. This financial year, I think, the capex is only Rs 450 crore and we have started on some of the pending projects,” he said.