Mukesh Udyog plans expansion, files IPO papers

Yarn manufacturer Mukesh Udyog has filed draft red herring prospectus with the market regulator Securities & Exchange Board of India (SEBI) for public issue of 75 lakh equity shares of Rs 10 each.

Company engaged in the business of manufacturing of acrylic, polyester, polyester cotton and cotton, combed and carded yarns. It has current installed capacity of 30,000 spindles for acrylic, cotton blended and polyester yarns.

Issue proceeds are proposed to be used for expansion of spinning unit from its current capacity of 30,000 spindles to 43,200 spindles (with the estimated cost of Rs 32.88 crore); setting up of hot rolling mill facility with an annual capacity of 49,000 TPA (with estimated cost of Rs 20.95 crore) and working capital requirements.

"Company is expanding the capacity of existing spinning unit by setting up a new facility of 13,200 spindles at existing location at VPO Buddhewal, near Kohara Teh. and Dist. Ludhiana for manufacturing of cotton and synthetic yarn."

For the period of six months ended on September 2010, it has reported a net profit of Rs 3.42 crore on total income of Rs 66.92 crore.

Corporate Strategic Allianz Limited is the book running lead manager to the issue.