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Feb 13, 2007, 06.28 PM IST | Source: Moneycontrol.com

Aggressive investors apply for Indus Fila IPO: Experts

Indus Fila proposes to enter the capital market on February 12 with a public issue of 48,43,789 equity shares of Rs 10 each. Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.

Indus Fila, engaged in yarn dyeing, fabric weaving, fabric processing and apparel manufacturing, proposes to enter the capital market on February 12, 2007 with a public issue of 48,43,789 equity shares of Rs 10 each through 100% book building process.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.

Experts/Company

Poll Result

Experts view

R S Iyer

(KR Choksey)

Apply

Indus Fila is not an extraordinary issue. Aggressive investors can apply for it. It can list with 30% premium by help of operators.

SP Tulsian

(Investment Advisor)

Apply

Indus Fila is a good issue. They have hold on designing section. Their promoters have good expertise in the respective area. So investors should apply for it and hold for short as well as long term.

Manish Bhatt

(Prabhudas Lilladher)

Apply

Indus Fila looks to be good issue and available at a 14-15x PE of 2007 and 8x PE of 2008. He is expecting CAGR of 30-40% from FY07. It is a fully integrated yarn manufacturing company. The company is not more concentrating on garment business. Post expansion, its yarn dyeing capacity will be 12,300 kg per day, weaving more than 97000 mtrs per day, processing 1 lakh mtrs per day and garment manufacturing 42,000 pieces per day. Export revenues contribute 95% of total revenues and 5% from domestic business. People can apply with at least one-year perspective. Its operating margins is also higher.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The price band has been fixed at Rs 170 to Rs 185. The issue closes on February 14, 2007. The issue would constitute 25% of the fully diluted post issue paid up capital of the company.

Anand Rathi Securities is the BRLM for the issue and Datamatics Financial Services is the registrar to the issue.
 
The issue is being made through the 100% book building process wherein up to 50% of the net issue to public shall be allocated to qualified institutional buyers, QIB's on a proportionate basis. Out of the portion available for allocation to the QIB's, 5% will be available for allocation to mutual funds. Mutual fund applicants shall also be eligible for proportionate allocation under the balance available for the QIB's.

Further, not less than 15% of the net issue to public shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the net issue to public shall be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price. The equity shares are proposed to be listed on the BSE and the NSE.
 
The company proposes to utilize the net proceeds of the issue to part finance its Rs 166.24 crore plan for expansion of capacities in weaving, yarn dyeing and setting up of ``Centre of Excellence'', processing and garmenting. The plan has been appraised by Corporation Bank, Karnataka Bank and UTI Bank for total rupee term loan of Rs 74 crore sanctioned by these banks. The entire rupee term loan is eligible for a 5% interest subsidy under the technology upgradation fund scheme, TUFS. Under the amended provisions of TUFS, the company will also be eligible for an additional incentive of 10% capital subsidy for the specified textile processing machinery.
 
The company's operational income and profit after tax for the year ended March 31, 2006 is Rs 82.49 crore and Rs 5.49 crore respectively and for the half year ended September 30, 2006 it is Rs 109.18 crore and Rs 10.63 crore respectively. Its operational income and PAT have grown at a CAGR of 99.29% and 147.23% respectively over the period of five years and six months.
 
Presently, it is operating with 156 weaving looms (including 48 looms under 100% manufacturing agreement) producing approximately 20.80 million meters of fabric per annum and 750 sewing machines with production capacity of 2.70 million garments per annum.
 
The company has integrated Design-to-Delivery capability with emphasis on design excellence and innovative product engineering. Its multi-location production facilities spread across Bangalore and Mysore.

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