The Hindu Business Line : Everest Kanto plans IPO to raise Rs 90 crore

EVEREST Kanto Cylinder Ltd, manufacturers of high pressure industrial and CNG gas cylinders, is coming out with an initial public offering through the 100-per cent book-building route to raise Rs 90 crore. The price band for the issue has been fixed at Rs 140-160. The issue will open on November 22 and close on November 25.

Talking to reporters here on Thursday, Mr P.K. Khurana, Chairman and Managing Director, Everest Kanto, said the entire proceeds would be ploughed into the new project being set up at Gandhidham in Gujarat that will almost double the company's manufacturing capacity from 3.66 lakh units a year to 7.04 lakh units.

The Rs 106-crore project in Gandhidham is expected to leverage on the tax sops offered by Gujarat and also benefit from access to the ports of Kandla and Mundra as the steel tubes, raw material for the gas cylinders are imported. The first phase of this project is expected to be flagged off by December 2005.

Everest Kanto, currently the third largest manufacturer of high pressure gas cylinders in the world, after Faber Industrie SpA, Italy, (7.5 lakh units) and Worthington Cylinder Corporation, Austria (7 lakh units), is looking to catapult to the second position once the Gujarat plant goes fully on stream by March 2006.

"We are looking to emerge the world leaders in this specialised business over the next 4-5 years. This can come only by having multi-location manufacturing bases across the world. A start was made last year when we commissioned our 96,000-unit Dubai plant. Next on the cards is China where we are planning a 5-lakh unit facility over the next three years," Mr Khurana said.

The company has entered into a joint venture agreement with Cangzhou Gas Corporation, China, to set up a $15.8-million plant initially with a 1.2 lakh unit capacity, scalable up to 5 lakh units with Everest Kanto taking 65 per cent equity.

It has also signed an MoU with Jahad Tahghighat group of Iran to set up a plant there, though no agreement has been signed.

Meanwhile, Everest Kanto is testing waters in Russia, Ukraine, Armenia and even Pakistan, with the latter accounting for almost 80 per cent of the company's output from its Dubai plant. Currently 35 per cent of the company's sales comes from exports. During 2004-05, Everest Kanto had a sale of Rs 132 crore and a net profit of Rs 14 crore.

The book running lead managers to the issue is SBI Capital Market.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
NSDL clocks rise in investor accounts

CNBC-TV18's `Your Stocks' team to cover Mangalore tomorrow

UTI plans SPrEAD Fund aiming to tap cash, derivative difference

SBI MF launches floater fund

Oil stocks flare up as global crude price falls

Volatile movement

Aegis Logistics betting on prospects

Gati rises on foray into international markets

FII cap reached in Voltas

Sensex ends flat after a choppy session

Everest Kanto plans IPO to raise Rs 90 crore

Triveni Engg gets SEBI nod to issue 5 crore shares