Circuit Systems to use IPO proceeds to set up new plant

Circuit Systems has an issue price fixed at Rs 35, with an issue of 42 lakh shares. Paresh Vasani , MD of Circuit Systems (India) said that the company is involved in manufacturing since the last ten years.

The money raised from the issue will be used to set up a new plant at the Gandhinagar SEZ. Circuit Systems expects to start operations by the second half of next year.  

According to Vasani, as 75% of their raw material is imported, they are getting the benefit of rupee appreciation .

Excerpts from CNBC-TV18’s exclusive interview with Paresh Vasani:

Q: Give us an idea of the objective of the issue. What are you raising this money for?

A: Circuit System is involved in manufacturing, since the last ten years. This money is going to be used for setting up a new plant at the SEZ in Gandhinagar, Gujarat.

Q: You are looking at raising about Rs 15 crore from the project. How much time will it take for the project to come onstream?

A: The land has been already allotted to us for the SEZ. A majority of the machines have already been procured from outside India.

We are going to start construction hopefully before Diwali. We should be in operation by the second half of the next year.

Q: 30% of your revenues come in from exports. Is there a concern to the exposure of the rupee right now?

A: No, because 75% of our raw material is imported. So, we are also getting benefited from the rupee appreciation.

Q: What is the kind of growth rate that you have been able to clock, over the last ten years?

A: If you look at last year’s growth, we have achieved about 30% revenue topline growth and the market looks quite attractive for us.

A lot of investments are coming from outside India, as the Indian economy is doing well and we anticipate a lot of demand.  We hope to achieve good amount of growth.