The Hindu Business Line : Sree Sakthi Paper to enter market to raise Rs 25 cr

AFTER a gap of nearly a decade, activity has picked up in Kerala's IPO (initial public offering) market with the Kochi-based Sree Sakthi Paper Mills Ltd announcing its maiden public issue.

The company has obtained clearance from the Securities and Exchange Board of India to raise Rs 25 crore from the capital market. Mr S. Rajkumar, Managing Director, Sree Sakthi Paper Mills, told Business Line that the company had also obtained the BSE approval for listing its share. SBI Capital did the appraisal of the proposal for project expansion and has recommended the project as feasible and economically viable, he added.

Sree Sakthi Paper Mills, which manufactures various grades of kraft paper, and duplex, special coloured and file boards, has had a steady growth in its business over the last 12 years.

"We started with a capacity of 5,000 tonnes in 1993. In the past 12 years, we have increased our capacity to 40,000 tonnes. This is a clear indication of the growth potential of the sector," Mr Rajkumar said. The company plans to increase the capacity at Edayar unit by another 30,000 per annum to reach the total capacity to 70,000 tonnes per annum, he said.

Referring to the financial position, he said the company had made a profit of Rs 1.9 crore in 2004. It had achieved a profit of Rs 3.02 crore ending March 31 this year. In the first seven months of the current fiscal, the profit had already touched Rs 2.10 crore, he said.

According to Mr Rajkumar, the demand for most of the company's products would also go up considering the growth in the economy.

The proposed capacity expansion also includes a 2-MW co-generation power project that would take care of a part of the power requirement of the company's manufacturing unit. The biomass from the company's paper production process will be used to produce power. The investment for the power project is estimated at Rs 7 crore, he said.

The company is fully environment- and eco-friendly, using only recovered paper as raw material for its production and has been awarded by the Kerala State Pollution Control Board for its best Pollution Control System maintenance.

The promoters of Sree Sakthi Paper Mills belong to a Rs 150-crore conglomerate in Kerala with interests in logistics, construction and real estate, trading, biotechnology.