The Hindu Business Line : Gwalior Chemical to raise Rs 80 crore through IPO

TAPPING NEW MARKETS: Mr Ashwin Kothari, Chairman, Gwalior Chemical Industries Ltd, with Mr Harisingh Shyamsukha, ED, at a press conference to announce the company's IPO in Mumbai on Tuesday. - Paul Noronha

Mumbai , Sept. 5

Gwalior Chemical Industries Ltd will enter the capital market through an initial public offering of equity shares aggregating Rs 80 crore.

The price band for the issue has been fixed at Rs 71 - Rs 85 per share.

The issue opens on September 11 and closes on September 14.

50% to QIBs

Of the total public offer, up to 50 per cent will be allotted to qualified institutional buyers (QIBs), of which, 5 per cent is reserved for mutual funds; 15 per cent will be allocated to non-institutional bidders and the balance 35 per cent will be for retail individual bidders on a proportionate basis.

Expansion plans

The company plans to use the monies to expand its plant capacities at Nagda, Madhya Pradesh, to cater to export and domestic markets.

The company also plans to set up fresh capacities at Nagda and Ankleshwar for producing second stage downstream products including benzyl esters and acid chlorides and a new plant for viscose dye pigments.

The company intends to complete the expansions by December 2007.

"At present, the company has facilities to manufacture first stage downstream products and we intend to further expand into the second stage of value added downstream products like esters," said Mr Ashwin Kothari, Chairman, GCIL.

Overseas markets

The company has a subsidiary in Belgium providing marketing support and storage facilities.

It plans to foray into the Japanese and American markets in the future.

Net sales for GCIL stood at Rs 170.63 crore and net profit at Rs 15.59 crore for fiscal 2006 as compared to net sales and net profit of Rs 136 crore and Rs 13.02 crore for fiscal 2005.

JM Morgan Stanley Pvt Ltd is the book running lead manager to the issue.