The Hindu Business Line : Kamdhenu Ispat plans IPO to fund greenfield project

Kamdhenu Ispat Ltd (KIL) is planning to enter the market with its initial public offering (IPO) by May this year to fund its greenfield expansion project in Uttaranchal.

Speaking to Business Line, the KIL Chairman, Mr Satish Aggarwal, said that the public issue would comprise one crore equity shares of Rs 10 each, at a premium of Rs 5-10 per share, which is yet to be finalised.

The draft prospectus, Mr Aggarwal said, would be filed with the Securities and Exchange Board of India (SEBI) within the next two weeks and the issue would be floated at an early date thereafter.

Kamdhenu currently manufactures HSD/TMT bars and GI pipes and the proposed plant in Uttaranchal would also be having the same product-mix, he said.

The total investment for the plant is estimated at around Rs 22 crore, which is to be funded through the issue proceeds and internal accruals.

During fiscal 2002-03, the company recorded a turnover of around Rs 150 crore and for the current year, it is targeting a turnover of Rs 250 crore. The company is also in the process of expanding its market share through the franchise route.

According to Mr Aggarwal, HSD/TMT rods and HI pipes have all along been treated as commodity only and the company is working out franchise arrangements with existing producers and providing them technology and marketing support to help them market their product under the Kamdhenu brand name.

If everything goes on as per schedule, the proposed new plant will commence commercial production in March 2005, Mr Aggarwal said.