Jindal Cotex is coming out with an initial public offering (IPO) of 1,24,53,894 equity shares of face value of Rs 10 each for cash at a price of Rs 70-75 per equity share aggregating Rs 87.18-93.40 crore, as per the RHP (red herring prospectus) filed by the company with the market regulator SEBI (Securities and Exchange Board of India).
The issue will open for subscription on August 27 and close on September 1, 2009. The issue comprises of promoters’ contribution of 12,03,894 equity shares and reservation of 5,00,000 equity shares for eligible employees. So, the net issue to the public is of 1,07,50,000 equity shares. The net issue shall constitute 43% of the post issue paid up capital of the company. At higher price of band, the company will raise Rs 93.40 crore; out of which, the promoters will receive around Rs 9 crore.
The proceeds from the issue (excluding public issue expenses) will be used for setting up a new facility for manufacturing of cotton yarn, yarn dyeing and garments and investment in subsidiaries namely Jindal Medicot & Jindal Specialty Textiles.
The company is engaged in the business of manufacturing of acrylic, polyester, and polyester-viscose, polyester cotton, combed and carded yarns, which are appropriate for apparels, suitings and knitted fabrics. The yarns produced by the company are used for made ups in apparels, hosiery & garment industry.
It has current installed capacity of 23,472 spindles for acrylic, cotton blended and polyester yarns with a manufacturing capacity of 6500 TPA. It manufactures and sell yarns under the trade name ‘JINDAL’.
The issue has been graded by Brickwork Ratings India Private Limited and has been assigned a grade of 3/5 indicating average fundamentals.
For the quarter ended June 2009, the company reported net sales of Rs 29.08 crore and net profit of Rs 1.84 crore. For the year ended March 31, 2009, it has reported net sales of Rs 138.58 crore and net profit of Rs 4.34 crore.
Equity shares issue via IPO are proposed to be listed on the Bombay Stock Exchange Limited (BSE) and on the National Stock Exchange of lndia Limited (NSE).
Saffron Capital Advisors Private Limited is the book running lead manager to the issue and Bigshare Services Private Limited is registrar to the issue.