Don't need funds for SEZ development now: Pradip Overseas

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Pradip Overseas, a textile manufacturer with a niche focus on home linen products, is entering capital market with an initial public offering (IPO) of 1.06 crore equity shares of Rs 10 each on March 11, 2010.

The issue comprises 5 lakh equity shares reserved for subscription by eligible employees and a net issue to the public of 1.01 crore equity shares. The issue will constitute 26.26% of the fully diluted post issue paid-up capital of the company. The issue will close for subscription on March 15.

The objects of the issue are to part finance the setting up the proposed manufacturing facility within the proposed textile SEZ as well as to part finance the incremental margin money requirement for working capital.

As per the DRHP filed in January 2009, promoters' holding in the company will reduce to 68.68% from 93.16% post the issue.

The book running lead manager to the issue is Anand Rathi Advisors Limited and Intime Spectrum Registry Limited is the registrar.

In an interview with CNBC-TV18, Amit Thakkar, President, Pradip Overseas Ltd spoke about the company's business and expansion plans.

Here is a verbatim transcript of the interview. Also watch the accompanying video.

Q: What do you plan to do with this Rs 116 crore that you are planning to raise?

A: Our total project is of Rs 200 crore. Out of this, Rs 100 crore is capex and Rs 100 crore is working capital margin, and out of that Rs 65 crore term loan has already been tied up with SBI, Dena Bank and Allahabad Bank. The rest is from the IPO, and whatever is the balance would be definitely through internal accruals.

Q: What is the completion target of this expansion? How much would it increase your capacity by and when does it come on stream?

A: It would increase to 3.3 crore metre capacity of processing per annum and our target is to complete by January to March 2011.

Q: Does this include a unit in the proposed SEZ as well?

A: Yes it is in the SEZ itself.