SEL Textiles plans 1.1 cr shares IPO

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SEL Textiles, a subsidiary of SEL Manufacturing Company and the flagship company of RS Saluja Group, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for public issue of 1.1 crore equity shares.

The issue consists of reservation of 2 lakh equity shares for eligible employees and the remaining 1.08 crore equity shares for public. The issue will constitute 27.76% of the fully diluted post issue paid-up capital of the company.

SEL Manufacturing Company, a holding company, will dilute its stake to 72.06% from current 99.75% through this issue.

SEL Textiles is engaged in the business of manufacturing combed and carded cotton yarns, which are appropriate for apparels, suitings & knitted fabrics.

The company intends to use issue proceeds for setting up a new facility for manufacturing of Terry Towels with an installed capacity of 3600 TPA.

It acquired the existing spinning unit known by the name of 'Prerna Syntex at Neemrana, Rajasthan from Vast Textiles in June 2009 with an installed capacity of 24,960 spindles to produce 16.80 tonnes cotton yarn per day. The company has entered into an MoU dated August 21, 2009 for the acquisition of a existing spinning unit at Hansi, Haryana from Radhika Fibres India Limited, New Delhi with an installed capacity of 25,200 Spindles to produce about 17.08 tonnes of cotton yarn per day.

For the period of nine months ended on December 2009, it has reported profit of Rs 72.64 lakh on total income of Rs 18.8 crore.

SEL Manufacturing Company had raised over Rs 35 crore via public issue in July 2007.

The book running lead manager to the issue is Saffron Capital Advisors Private Limited and Link Intime India Private Limited is the registrar.