The Hindu Business Line : Lokesh Machines to expand

Lokesh Machines Ltd, the Hyderabad-based machine tool company, has embarked on a process to expand and modernise operations and is adding an auto component tool line.

The company is entering the capital market with a maiden offer of 30 lakh equity shares of Rs 10 each at a premium, to part fund its expansion and modernisation drive. The company is poised to raise about Rs 45 crore through book building process. Its shares have been placed in the price band of Rs 130-140 per share. The Managing Director, Lokesh Machines, Mr Lokeshwara Rao, told Business Line the IPO funds would be deployed in this expansion and to meet the working capital requirements. The issue, managed by UTI Securities and Karvy, is slated to hit the market on April 7.

Established in 1984, Lokesh Machines has grown to a company with revenues of Rs 100 crore. In the last five years, it has registered a compounded annual growth rate of 30 per cent. Its machine tools, special purpose machines (SPMs) and computerised numerical controls (CNCs) lathes are used by top automotive companies — Mahindra and Mahindra, Ashok Leyland, Tata Motors .

While the new assembly line for Ashok Leyland Ltd, would be ready by this October, the modernisation project would be completed by March 2007.

"Currently, exports to Germany and Japan account for about 10 per cent of the overall revenues and we expect this to grow to about 25 per cent within five years. The modernisation and upgradation of the existing facilities for the CNC machine tools is aimed at meeting this growing demand," he said.

The company has a healthy order book position of about Rs 150 crore, which includes two orders from Germany and Italy.

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