The Hindu Business Line : V Guard plans Rs 70-cr IPO in Oct

Addressing a press conference here last evening, Mr Kochouseph Chittilappilly, Managing Director, said a part of the proceeds from the equity offer would be used for opening new factory in Himachal Pradesh and Uttarakhand. The remaining would be invested in creating a new cable factory, extending the distribution and service network mainly in North India and for creating improved R&D facilities, he said.

The 30-year-old company has a strong presence in the whole spectrum of voltage stabilisers, fans, pumps, cables, solar water heaters, electric water heaters and UPS in the South.

With the opening of the production facility in Himachal Pradesh, the company plans to transform its market share from 80:20 to 60:40 in the North - South regions, Mr Chittilappilly added. Anandrathi Securities Ltd has been appointed as the lead managers to the issue.

The company has recorded a 31 per cent growth in sales turnover to Rs 241 crore (Rs 184 crore) and has targeted a turnover of Rs 320 crore for the current year. Its net profit grew by 45 per cent to Rs 13.32 crore last year, while gross profit recorded a 44 per cent growth to Rs 20.49 crore. There was a fall in the EPS from Rs 30.68 to Rs 13.96 as on March 2007.

Most of the enhanced equity was subscribed to by the promoters and four per cent was extended to the employees of the company. Along with the IPO, the company also planned an ESOP, which is expected to take the employees’ shareholding to eight per cent.

The promoters are also expected to dilute a small portion of their stake to business associates at a market related price at the time of the public issue.

The company also planned to undertake a further product diversification, again within the core competency field of the company.

Among the major focus of the company for the immediate future would be in attaining a pan-Indian presence. V Guard already has a presence in 18 States with over 100 service centres and distributor network.

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V Guard plans Rs 70-cr IPO in Oct