Meghmani fixes IPO price band at Rs 17-19; opens on June 4

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Meghmani Organics engaged in the manufacture of Pigments and Agrochemicals, proposes to enter the capital markets with a public issue aggregating Rs 1020 million with a price band of Rs 17 to Rs 19 per equity share of Re 1 each.

The issue opens for subscription on June 4, 2007 and closes on June 7, 2007.

The issue is being made through 100% book building process wherein at least 60% of the Issue shall be allotted on a proportionate basis to qualified institutional buyers (QIBs). 5% of the QIB portion shall be available for allocation on a proportionate basis to mutual funds only. If at least 60% of the issue is not allotted to QIBs, then the entire application money will be refunded.  Further, up to 10% of the issue shall be available for allocation on a proportionate basis to non institutional bidders and up to 30% of the issue shall be available for allocation ona proportionate basis to retail individual bidders, subject to valid bids being received at or above the Issue Price.
 
The company is a quality-oriented and research-focused organization with a diversified presence in pigments and agrochemicals, and offers a range of products catering to a diversified customer base. Within Pigments, the Company specializes in green and blue pigments, which have varied end use applications including printing inks, plastics, rubber, paints, textiles, leather and paper. Further Meghmani manufactures three broad categories of Agrochemical products, namely, pesticide intermediates, technical grade pesticides and pesticide formulations used in crop protection and non crop applications such as public health, termite and insect control and veterinary applications.

The Company has 4 manufacturing facilities located in the chemical belt of India and enjoys several benefits owing to its integrated multi-functional plants.

The company's pesticide formulations sold under brands such as Megastar, Megacyper, Courage and Proven are recognized brands in the Indian market. The Meghafast brand is also a recognized brand name with multinational pigment consumers. 

The objects of the issue are to finance the setting up of a new high performance pigment plant at Vatva, Ahmedabad and a multi-purpose agro-chemicals plant at Panoli. Further the company would use the issue proceeds to invest in its subsidiary, Meghmani Energy Limited to finance the 3 MW captive power plant to be located at Chharodi, inorganic growth/ diversification opportunities and working capital requirements. 

Meghmani is a profitable company since inception. Its revenues have grown from Rs 1,772.70 million in FY2002 to Rs 3,891.61 million in FY2006 at a CAGR of 17.03 % and net profits have increased from Rs 235.19 mn in FY2002 to Rs 383.38 million in FY2006 at a CAGR of 10.26 %. The revenues for the nine months ending December 2006 are Rs 3,553.4 million and net profit after tax is Rs 320.77 million.

IL&FS Investsmart and Edelweiss Capital are the book running lead managers for the Issue.