The Hindu Business Line : Dwarikesh Sugar plans IPO to raise Rs 32.5 cr

(From left) Mr K. Srinivas, Head of Investment Banking, UTI Securities Ltd, with Mr Jagdishkumar R. Banka, General Manager (corporate Affairs), Dwarikesh Sugar Industries Ltd, and Mr B.J. Maheshwari, Asst. Vice-President (Taxation) & Company Secretary, at a press conference to announce company's IPO in Mumbai on Wednesday. - Paul Noronha

Mumbai , Nov. 24

DWARIKESH Sugar Industries Ltd, promoted by Mr G.R. Morarka is entering the capital market with public offer of 50 lakh equity shares of Rs 10 each at a premium of Rs 55 per share aggregating Rs 32.50 crore.

The public issue will open for subscription on November 29 and close on December 3.

The company is setting up a 30 kilolitres per day (KLPD) distillery for the manufacture of industrial alcohol and a 200-tpd sugar refinery with packaging facilities. The company is also adding balancing equipments to the current plant to increase the capacity utilisation to 85 per cent.

The company currently generates 29,398 tonnes of molasses. The company is in the process of setting up of 30 KLPD distilleries for the manufacture of industrial alcohol at the present location. The company would use molasses to produce 30,000 litres of spirit everyday and convert the same into 28,300 litres of industrial alcohol also known as ethanol.

The total capital expenditure for these projects is Rs 38.50 crore, which is to be funded by the public issue of Rs 32.50 crore and a term loan of Rs 6 crore.

The company's board of directors include Mr Suresh Neotia, Chairman of Gujarat Ambuja Cement; Mr Vivek Saraogi, Managing Director of Balrampur Chini Mills; and Mr M.G. Diwan, former Chairman and Managing Director of LIC of India. The company operates a 6,500-TCD sugar plant at Bijnor in the sugar rich belt of UP and co-generates 9-MW of power. The company's sugar is recognised in the market by the name `Bundki' and `Dwarikesh'.

During the year ended September 30, 2004 the turnover registered a net growth of 76.35 per cent compared to the last fiscal. The company's profit for FY 2004 has grown to Rs 9.76 crore (after providing for Rs 6.27 crore towards price differential between SMP & SAP for earlier years) against Rs 2.06 crore in FY 2003. The earnings per share for FY 04 was Rs 12.13 and the book value per share on September 30, 2004 was Rs 50.10.

Post-public issue, the paid-up capital of the company will be Rs 12.56 crore and net worth will be Rs 70.37 crore.