The Hindu Business Line : Bombay Rayon plans IPO to raise Rs 94 crore

Mr Prashant Agrawal (Left), Managing Director, Bombay Rayon Fashions Ltd, and Mr. Aman Agrawal, Vice-Chairman, at a press conference to announce the company's IPO to be opened on November 11 in Mumbai on Monday. - Shashi Ashiwal

Mumbai , Nov. 7

BOMBAY Rayon Fashions Ltd is entering the capital market with an initial public offering of 1.35 crore equity shares of Rs 10 each. The price band for the issue has been fixed at Rs 60 to Rs 70 per equity share. The company hopes to raise between Rs 85 crore and Rs 94 crore through the issue which will open on November 11 and close on November 17.

Mr Prashant Agrawal, Managing Director, Bombay Rayon, said the funds are being raised to part-finance its new project that is being set up at a total cost of Rs 161.72 crore.

The project, with integrated facility of yarn dyeing, weaving process house and garment manufacturing, is coming up at Doddaballapur, near Bangalore.

Export-Import Bank of India has acquired 10 lakh equity shares of Rs 10 each (constituting 2.82 per cent of the pre-issue capital) at a price of Rs 50 a share (including premium) aggregating to Rs 5 crore on preferential basis, the company said.

The composite textile unit will have a daily yarn dyeing capacity of 2,000 kg, 48 looms of weaving capacity, 93,999 metres of processing capacity and 22,000 pieces of garment production capacity. The project is likely to go on stream by March 2006, Mr Agrawal said.

"We plan to have fully vertically integrated facility at Bangalore, which will reduce the turnaround period for our export orders to 60 days from the present period of 120 days. As international fashion cycles are getting shorter we would be able to service our overseas clients in less time," Mr Agarwal said.

The project debt portion of Rs 101.72 crore has been tied up under the Technology Upgradation Fund Scheme of the Ministry of Textiles, and it will come at a five per cent interest subsidy. The company will also be eligible for additional incentive of 10 per cent capital subsidy for investments in specified textile processing machinery, he said.

During 2004-05, the company earned total revenue of Rs 109.65 crore and net profit of Rs 7.26 crore. For the quarter ended June 30, 2005, the total revenue of the company was Rs 44.28 crore and net profit was Rs 4.77 crore.

The book running lead managers to the issue are UTI Bank Ltd and Anand Rathi Securities Pvt Ltd.

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Bombay Rayon plans IPO to raise Rs 94 crore — Price band fixed at Rs 60-70 a share