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JHS Svendgaard Laboratories is open for subscription with a public issue of 67,00,000 equity shares of Rs 10 each including promoters contribution of 5,00,000 equity shares of Rs 10 each. The issue closes on Wednesday, October 4, 2006.

The equity shares of the company will be listed on the National Stock Exchange of India and the Bombay Stock Exchange. UTI Bank, Centrum Capital and Bajaj Capital are the book running lead managers to the issue.

The Khandwala Securities report on JHS Svengaard IPO:

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Business overview

JHS is a Dental and oral health care products manufacturing company manufacturing wide range of Oral care products as a private label manufacturer for many domestic and global brands beside this it also has its own toothpaste brand 'Taazagi' in the local market but not significant in revenue as well as volume terms. Their products include:

• Toothbrushes
• Toothpaste
• Whitening Gel
• Whitening Mouth Rinse
• Denture Cleaning Effervescent Tablet
• Tongue Cleaners

JHS has production facilities at New Delhi and a 100 % EOU at Noida Special Economic Zone- Unit III (NSEZ) in the state of Uttar Pradesh. Further it has already acquired land at Kala Amb in Himachal Pradesh, which is in excise free zone notified by Central Govt.

Objectives of IPO

• JHS is planning to raise Rs 328-388 million through public issue of 6.7 million equity shares of Rs 10 each out of this public issue promoters' contribution will be 5,00,000 equity shares and net issue to public will be 6.2 million equity shares of Rs 10 each.
• Amount raised from issue will be used for setting up proposed Anchor Free Toothbrush facility and facility for other products at Kala-Amb in Sirmour, in Himachal Pradesh and increase the installed capacities of existing production facilities at NSEZ.

Expansion of installed production capacity

JHS proposed to increase installed production capacities by

Products	Existing Capacity	Proposed Capacity	Total Capacity
Toothbrush (Million Units)	40	76	116
Toothpaste (Tonnes p.a.)	450	2,250	2,700
Denture Cleaning Effervescent Tablets (Mn Units pa)	5	175	180
Other Oral Care Products (Lt p.a.)	60,000	440,000	500,000

 

 

 

 

 

 

Anchor Free Technology

Anchor Free Technology is a landmark improvement over the conventional manual toothbrush technology other than electric toothbrushes. Conventionally toothbrushes were manufactured by drilling holes through brisling machine in wooden handles. Currently most of manufacturer gets preholed plastic handles through injection moulding process. However the current process does not enable the brushes to have shapes and sizes other than a round hole. This is because the anchor wire cuts through the hole of the handle to hold the bristles in the hole.

However in the case of Anchor Free Technology we can have different shapes and sizes. This has really picked up in USA and most of Europe amongst the manual as well as electrical toothbrushes since fixing bristles in the handle is common to both manuals as well as in electrical toothbrushes.

Customer base

Though JHS is dependent on few or limited numbers of customers but these customers are the leading players in the oral and dental care markets and global as well as domestic retail giants. Further its clients include Fortune 500 companies.

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