Kovilpatti Lakshmi public issue opens for subscription
Published on Mon, Nov 27, 2006 at 08:48 | Source : Moneycontrol.com
Updated at Mon, Nov 27, 2006 at 08:51
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Kovilpatti Lakshmi public issue opens for subscription
Kovilpatti Lakshmi Roller Flour Mills, a forty six years old diversified profit making company engaged in the activities of wheat flour milling, is open for subscription with a public issue of 26,00,000 equity shares of Rs 10 each at a premium of Rs 45 per share.
Kovilpatti Lakshmi Roller Flour Mills, a forty six years old diversified profit making company engaged in the activities of wheat flour milling, production of cotton yarn, sheet metal fabrication and generation of power through windmills, is open for subscription with a public issue of 26,00,000 equity shares of Rs 10 each at a premium of Rs 45 per share (Issue price Rs 55/- per equity share) aggregating Rs 14.30 crore.
The issue closes on December 1, 2006.
Out of the total offer of 26,00,000 equity shares, 2,60,000 equity shares are reserved for allotment to employees, 5,20,000 equity shares for NRI's and FII's, 5,20,000 equity shares for banks, mutual funds and financial institutions, and 2,60,000 equity shares for existing shareholders, leaving net issue of 10,40,000 equity shares for the public. The existing 24,01,046 equity shares are listed on Bombay Stock Exchange, BSE, Madras Stock Exchange and Coimbatore Stock Exchange and the additional 26,00,000 equity shares now on offer are also proposed to be listed on these stock exchanges.
It has a registered trademark "Kuthuvillaku" which is used for products marketed by flour and textile division. Its flour division manufactures wheat flour and markets it extensively in the South and Central regions of Tamil Nadu and Kerala. The textile division manufactures cotton yarn, which it markets primarily to clothing units in Maharashtra and Tamil Nadu and exports to East Asian countries such as Korea, Malaysia and Singapore.
The company proposes to utilise the net proceeds of the issue to part finance its Rs 30.60 crore expansion plan. The plan includes investment into a Coimbatore-based Eltex Super Castings and setting up of two additional windmills of 1.25 MW each for captive consumption. The company proposes to raise Rs 14.30 crore through this public issue to part finance the said expansion. The balance funding of Rs 16.30 crore is being funded through term loan and internal accruals.
Keynote Corporate Services is the lead manager to the issue and Intime Spectrum Registry is the registrar to the issue.
Kovilpatti Lakshmi currently has three divisions viz, Flour Mill, Spinning & Engineering. The milling capacities and spinning capacities are sizeable while the engineering division is relatively small and the management intends to focus on the same, going forward. As a part of this, the company has taken over Eltex Super Castings. A Coimbatore based engaged in the manufacture of Grey Iron, SG Iron and Alloy Iron castings for the last thirty years.
The company is proposing to expand the scope of its sheet metal operations through the acquisition of Eltex Super Casting and restarting of Eltex's foundry units. It will cater to the demands of leading domestic automotive and engineering companies as well as revive the European business of Eltex.
Kovilpatti Lakshmi has reported a turnover of Rs 93.07 crore and profit after tax of Rs 3.11 crore for financial year ended on 31/03/2006. As per un-audited results for half year ended 30/09/2006, company has achieved a turnover of Rs 55.70 crore and profit after tax of Rs 1.89 crore. The two windmills are expected to generate a net power output of approximately 68 lakh units.
The net financial benefits to the company is expected to be reduction in the cost of power by Re 1 per unit, thereby leading to a savings of approximately Rs 68 lakh in the electricity costs as per current consumption patterns. The company has funded the installation of these windmills through a term loan of Rs 4.85 crore from Canara Bank, a term loan of Rs 4.89 crore from Indian Overseas Bank and internal accruals of Rs 2.56 crore. The installation and commissioning has been completed in March 2006.
Kovilpatti Lakshmi has a consistent track record of dividend payment in 23 out of last 26 years with uninterrupted dividend payment since 1993. All the existing production facilities i.e. Flour mills and two textile units are ISO 9001-2000.
