Insecticides India to acquire domestic brand this week

Insecticides India, an agro chemical manufacturer is in the last stages of negotiating an acquisition of a domestic insecticides brand. Rajesh Agarwal, chairman and managing director, Insecticides India, said, "We should successfully able to close the deal by end of this week." The company expects the new brand to contribute 10% of its topline, he added.

Below is the transcript of Agarwal's interview with CNBC-TV18's Ekta Batra and Sonia Shenoy. Also watch the accompanying video.

Q: Just start off by telling us about the brand that you plan to acquire. When will it take place and what would it contribute to your revenues?

A: We should successfully able to close the deal by end of this week. We wish to launch it in the next year. It should contribute to about 10% of our topline and for the brand sales basically.

Q: What kind of acquisition is this? Give us some more details on in which segment it forms and what exactly are your financials?

A: I would like to hold the detailed discussions for a week’s time actually, till we sign the assignment of this brand. It will be my pleasure to discuss in the first week of March. But this deal is through and it’s a big brand for us.

Q: Are you acquiring an existing brand or is it a patent which you would be re-launching an absolutely new product? What's the valuation you are possibly working with in order to acquire this brand?

A: These are two different things actually. We are already working on a patented product. That deal is also through and that brand will be launching in the next year, April onwards, for which we have collaborated with one company. Details about that are yet to be announced because we have not filed a formal agreement so far.

The second thing is we are discussing about taking over a brand which is a domestic brand. This one has been a very strong brand in the past and we will be re-launching that brand.

Q: How much are you shelling out in terms of funds and where will you pump in this money from? Any kind of debt raising?

A: The entire amount will be from the internal accruals. We are not looking at somewhere outside the exactly number will come shortly.

Q: Just trying to understand, internal accruals, what is your cash on books currently?

A: I don’t remember exactly; but we can finance this brand.

Q: Just coming down to business then how exactly is the domestic business doing and how exactly are your exports scaling up as well?

A: The domestic business is going fine. We are growing at a speed of about 30% this year. I am quite confident we would close the year with 30% plus growth.

On the exports front, we are still on a developing phase. This is because there has been a little delay in the plants which were supposed to start in February - March, now they will be starting in April. The entire focus of exports has shifted to the new year.

Also, I see the revenues coming in from exports next year. It will be a small start and not a big leap at once. In  2011-12, our major focus will be domestic market.