The Hindu Business Line : SEL fixes IPO price band at Rs 80-90

Mumbai, July 19 SEL Manufacturing Co Ltd of the R.S. Saluja Group has announced an initial public offering of 41,38,410 equity shares of Rs 10 each through 100 per cent book-building process. The price band has been fixed at Rs 80-Rs 90 per equity share and the offer would be on from July 26 to July 31. UTI Bank is the book running lead manager for SEL.

“We have been growing since the past two to three years and will use the funds raised through the IPO for expansion purposes,” said Mr Sanjay Jain, Director, SEL.

The debt-equity ratio is at 1.2:1 and the company has taken bank loans of Rs 180 crore. About Rs 103 crore will be raised through long-term debt, Rs 37 crore through the IPO from the higher end of the price band and the rest from internal accruals, said Mr Neeraj Saluja, Managing Director.Exim Bank has subscribed to 7,60,800 equity shares of Rs 10 each at Rs 65 per share, including a premium of Rs 55 per share, to become a strategic and financial partner of SEL.

The company has fully tied-up debt component of Rs 103.79 crore under the TUFS.

The vertically integrated textile company intends to expand its spinning capacity to 74,256 spindles, knitted fabrics to 7,050 tonnes per annum and garments to 7.5 million pieces per annum with capital raised from the IPO. Exim Bank has sanctioned a term loan of Rs 25 crore million towards the expansion project.

Garments contribute to 50 per cent of the company’s turnover and are exported to Russia and West Asia. Yarn and fabric is exported to 25 other countries.

Listing of the company’s shares is expected to be on August 16, said Mr Saluja.

Total income of SEL increased from Rs 67 crore in the financial year 2006 to Rs 182 crore in 2007.