Kesoram plans to infuse fresh capital of Rs 60 crore for Cygnet turnaround

Kesoram Industries Ltd plans to inject fresh capital of Rs 60 crore to transform Cygnet Industries Ltd, its wholly owned subsidiary, into a leading global supplier of cellulosic transparencies, a senior official of the company said on Thursday.

The Manjushree Khaitan-led company is the only company in South Asia that manufactures non-toxic, biodegradable translucent cellulose paper, also known as cellophane paper, used for wrapping and protecting food.

There is an increasing demand for cellulose transparencies in the developed economies of the world as well as in the country. He said the strategic investment will allow Cygnet to improve its manufacturing capacity, expand its product portfolio and achieve better quality standards.

“We are in discussions to bring in strategic investors, including with our technology partner Futamura, who can add value. Given the high demand, global supply of transparencies is in short supply and India could be a key supplier,” Kisuram P Radhakrishnan, Director of Industries and CEO throughout, said. time, for PTI.

He said the company is not ready to dilute its majority stake and may limit it to less than 26 percent.

BK Birla Group Company signed a Technical Memorandum of Understanding with Japan’s Futamura Group two years ago. The Japanese company may acquire a financial stake in Cygnet depending on the valuation.

Radhakrishnan said that Cygnet is able to generate EBITDA of Rs 60 crore annually after the proposed capital injection and support from the new technical and financial partner. But EBIDTA can increase to Rs.90-100 crore with the support of the strategic partner.

Cygnet also operates in the rayon viscose filament yarn and chemical manufacturing sectors and has approximately 2,500 employees. In FY23, it recorded sales of Rs. 260.62 crore and loss of Rs. 78.61 crore.