Aether management on using IPO funds to make company debt-free, expansion plans

Faiz Nagariya: Of course, after the IPO, we will be paying off the debts. We will be a debt-free company and that will be adding up to the bottom line. But we will not be able to give a forward looking statement. But definitely, it is going to be a good rise in our bottom line.

ET Now: You also plan to use the Rs 163 crore for expansion. Could you share some details regarding the same? By when will this get completed and what kind of top line boost do you anticipate on account of capital expansion?

Aman Desai: We will be doing a greenfield production site and that is almost finishing civil construction and we are going to start installing reactors this month. That will be commissioned by the end of this year and the revenues will be starting to get generated by the end of this year or early next year.

In terms of revenues from the new greenfield production site, unfortunately I am not in a position to give some forward looking statements but we are expecting to fully commission the production plant in this year.

ET Now: Can you talk about the cash conversion cycle? Recently it has shot up. How are you planning to bring this down once the IPO is done?

Faiz Nagariya: Yes, we would like to make up the cash cycle because currently our cash cycle is 120 days. We would like to bring it below 90 days and we would like to make the full utilisation of funds so that we are able to bring down debtors’ days and also the inventory days to a considerable level.

Currently, the inventory days are only the portion which is higher for four to six months but that will continue for important raw materials. But for other things, we will try that the raw material cycle of around three to four months.

ET Now: Over the last couple of years, you have managed to double your top line. What were the factors that led to this and more importantly, can this growth momentum continue in the coming three to five years?

Aman Desai: We have continuously added new products for the first time in India. The existing products have also grown reasonably well. We have expanded the contract research and manufacturing services business model and transferred some of the projects which were previously in the research area bucket to the manufacturing bucket and that has led to the increase in the top lines.

We have consistently increased our top lines in the last four, five years year-on-year and we will try our best to maintain this trend and continue to grow in a significant and sustainable manner.