The Hindu Business Line : Ammana Bio entering market

The Hyderabad-based Ammana Bio Pharma Ltd is entering the capital market with an initial public issue of Rs 2,166.02 lakh. It has fixed a price band of Rs 12 to Rs 14 per equity share of face value of Rs 10 each.

The equity shares will be issued at a premium price to be discovered through the 100 per cent book building process. The issue opens on March 28 and closes on April 5. Announcing the details of the IPO, Mr C. Balamouli, the main promoter, told newspersons that the promoters' contribution would be Rs 150.02 lakh. The IPO would be for Rs 2,016 lakh. For the general public, 35 per cent of the total issue or shares aggregating Rs 856.8 lakh have been reserved.

Expansion plans

The company is going in for the IPO to fund its expansion plans. It includes, expansion of existing unit to produce 30,000 litres per day of Extra Neutral Alcohol (ENA) and to commission a Sweet Sorghum project using multifeed stock to produce rectified spirits with latest technology.

At present, Ammana Bio Pharma has an ethanol manufacturing unit at Mouli Gram in Chittoor district of Andhra Pradesh, with a capacity of 90 million litres per annum. It is currently producing only 30,000 litres per day.

Similarly, about 210 litres of bio-fuel per annum is needed to manufacture three products — fuel ethanol known as gasohol; potable alcohol (ENA) and rectified spirit using sweet sorghum as raw material, which provides advantages over molasses, including low cost of production, Mr B.G.K. Murthy, Executive Director, said.

The grain from sweet sorghum is used to produce superior liquor.

The company plans to manufacture rectified spirit through multi fermentation process using raw materials such as sweet sorghum, jaggery, surgarcane juice, tapioca and grain.

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