The Ahmedabad-based Kiri Dyes and Chemicals (KDCL), manufacturer and exporters of dyes and dyes intermediates, is open for subscription with its initial public offering (IPO) of 37.5 lakh equity shares of face value of Rs 10 each. The price-band has been fixed at Rs 125 to Rs 150 per equity share.

Manish Kiri, MD of Kiri Dyes & Chemicals says that the money raised will be used to fund capex for backward integration. He adds that the company is setting up a basic chemical facility for the manufacturing of sulphuric acid, Oleum and Chlorosulphonic acid.

Excerpts from the exclusive interview with Manish Kiri:

Q: You are looking to raise about Rs 56 crore, what is the purpose of raising this money?

A: There are three objectives for this money; firstly we are setting up a basic chemical facility for the manufacturing of sulphuric acid, Oleum and Chlorosulphonic acid, which is backward integration project whereas the main objectives of the front would be to establish this production facility. Second objective is also to have the working capital for the same and expansion of our finished products capacity, which is dyes production.

Q: Specifically how much of your revenues at this point of time comes through exports and what do your top ten clients account for as a percentage of your revenues?

A: We have right now around 65% of our sales coming from exports. We have a direct presence in about 30 countries and our top ten customers includes 4 multinational companies, they are one of the leaders globally in our industry and its about 48% of our sales.

Q: For FY08 or perhaps going into FY09 as well, will the contribution of exports significantly come down and same for the contribution that you have on your top ten clients or will it remain 65-48 for both?

A: Usually our exports would be almost same as it is right now. The clients would remain same more or less but their quantities and the volumes may change but the clients numbers and names may remain same.

Q: What are your growth plans at this point in time, are you looking at any inorganic moves internationally at this juncture?

A: We are growing organically, not inorganically right now and there are three expansion projects, which are already in execution. Firstly our finished product capacity is increased about 50% is going to be started from next month that is in April 2008.

Secondly our basic chemical premises, which we have just mentioned for the IPO raise funds has already started its construction since November 2007. So we are well ahead of time to execute that project and to start it before December 2008 that is a second growth trigger and we are also starting a joint venture company, which is an Indo-Chinese joint venture company. The production of that joint venture would start in January 2009. So all three-growth triggers would be in the coming financial year and all three would be through the organic growth and we are not looking for inorganic growth right now till 2010.