The Hindu Business Line : SPL Industries plans to raise Rs 60 cr from IPO

SPL Industries, a Delhi-based knitwear and garment manufacturer, plans to enter the market with an IPO to raise around Rs 60 crore to fund capacity expansion.

It has filed a red herring prospectus with SEBI. The company is expecting to part-finance its expansion with a public issue of 90 lakh equity shares of Rs 10 each for cash at a premium through the 100 per cent book-built route.

Of the issue size, about Rs 35 crore will go towards expansion and the rest towards working capital expenses.

The total expansion cost is Rs 41.83 crore. IDBI has sanctioned a term loan of Rs 10 crore under the TUF scheme, of which Rs 5 crore has been disbursed.

The company has placed orders for machinery worth Rs 20 crore.

Post-IPO, the promoter shareholding would be diluted by 31.03 per cent. Its book running lead manager for the issue is Karvy Investor Services and co-book running lead manager is UTI Securities.

SPL also plans to add a new plant each for a yarn dyeing and the production of woven garments.

The company is ramping up capacities because existing clients, such as GAP and JC Penney, have increased the quantum of orders.

Other buyers have also asked the company to execute more orders.

According to Mr Vijay Jindal, Joint Managing Director, the company is also present in woven textiles and home textiles. The latter segment had already notched Rs 2 crore in sales and the company is creating capacities for it.

He added that buyers were increasingly seeking out vertically integrated players. "With the knitwear segment now open to medium and large companies, small players that benefited under the quota system would now feel the heat."

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SPL Industries plans to raise Rs 60 cr from IPO