Vishwanath Sugar & Steel to raise Rs 374 cr via IPO

Vishwanath Sugar and Steel Industries has filed draft red herring prospectus with market regulator SEBI for an initial public offering (IPO) of Rs 374 crore.

It is engaged into the business of production of sugar, alcoholic spirits by distillation including ethanol, blending and bottling of Indian Made Foreign Liquor (IMFL) and generation of power.

The company proposes to expand, with the IPO money, integrated production facility situated in Belgaum district by increasing the sugarcane crushing capacity from 5500 TCD to 11000 TCD. It also proposes to install a new boiler of 150 TPH capacity of 110 kg/cm2 pressure and a suitable turbine to co-generation unit to increase total
installed power generation capacity to 66.40 MW.

From the proceeds of the issue, the company also intends to deploy a part of the funds as capital expenditure to expand the capacity of distillery from the present 35 KLPD to 100 KLPD leading to an increase in IMFL production capacity from 2500 boxes per day to 5000 boxes per day.

Currently, the company manufactures more than 100,000 boxes a month of IMFL products.

It has an agreement to supply of approximately 4,200 KLs ethanol to IOC, BPCL and HPCL, which renewed for a further period of one year in 2011.

The company also has a power purchase agreement with Tata Power Trading Company Limited and Hubli Electricity Supply Company (HESCOM) for supplying power.

For the year ended March 31, 2011, it reported a total income of Rs 474.96 crore and net profit after tax of Rs 43 crore - a growth of 14.4% and 139.5% over previous year, respectively.

Ashika Capital Limited is the book running lead manager to the issue.