The Hindu Business Line : XL Telecom plans to enter capital market

XL Telecom Ltd, a Hyderabad-based telecom products company and a manufacturer of solar photovoltaic systems and ethanol, is entering the capital market with an initial public offering on December 4 through a book building process.

It is set to issue 39.56 lakh equity shares of Rs 10 each at a premium through a book building process and the price band has been pegged at Rs 125 to Rs 150 per equity share. The proceeds could mean raising about Rs 48 crore in the lower band and Rs 60 crore at higher price.

Providing an overview of the company plans, the Managing Director of the company, Mr Dinesh Kumar, said the issue proceeds are aimed to part fund its expansion plans, meet some working capital requirements and retire some term loans.

Last fiscal, the company recorded total turnover of Rs 400 crore with a net profit of about Rs 10.6 crore. Of this, Rs 300 crore was from the telecom business that included assembly of Kyocera CDMA handsets and wireless base stations, and Rs 50 crore from solar photovoltaic systems and the rest from their ethanol plant based in Maharashtra.

The Executive Director of the Company, Mr K. Vasudeva Rao, said that post the issue, the promoters stake will be down to 38 per cent. Earlier this year, the company had private placement of shares.

Mr Dinesh Kumar said they have a Rs 100-crore order from BSNL for handsets, and part of the funds would be deployed for its working capital along with funding the expansion plans for solar photovoltaic systems. XL plans to develop panels equivalent to 24 MW for export market.

Anand Rathi Securities and Centrum Capital are lead managers for the issue.