The Hindu Business Line : Tubeknit Fashions to enter capital market

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Mumbai Feb. 15 Tubeknit Fashions Ltd proposes to enter the capital market with an initial public offering of 37,55,000 equity shares and an offer for sale of the promoters' holding of 5,20,000 equity shares of Rs 10 each. Out of the total issue, 2 lakh shares will be reserved for employees. The issue would comprise 25.03 per cent of the fully diluted post paid up issue of the company.

The price band has been fixed at Rs 100-Rs 120. The issue opens on February 21 and closes on February 27. The proceeds will part-fund the company's expansion, which includes the setting up of a cotton yarn-spinning mill with 20,400 spindles.

The company will also add additional facilities for garment dyeing, printing, cutting, stitching and embroidery. The spinning unit is expected to commence production in August 2008 while the other expansions would be completed by June 2007. Post expansion, the capacity of the company will increase from 38,000 pieces per day to 78,000 pieces per day.

"The total cost of the expansion is about Rs 80 crore. Rs 40 crore have been tied up through term loans and the rest will be raised through the IPO," said Mr B. Sathrukkanan, General Manager (Finance), Tubeknit Fashions Ltd.

The company is also investing Rs 10 crore in a 50:50 joint venture with a company in Switzerland to manufacture garments primarily for exports.

"Through this joint venture, we will jointly set up another company and will also set up a separate export division within a year," said Mr S. Murugan, Director (Operations), Tubeknit Fashions Ltd.