The Hindu Business Line : Rathi Bars plans Rs 25-cr IPO

Bhiwadi, Oct. 8 Rathi Bars Ltd, manufacturer of cold twisted deformed (CTD) bars and thermo-mechanically treated (TMT) bars, is looking at raising Rs 25 crore through an initial public officer to fund expansion plans.

“We propose to tap the capital market with 71.43 lakh shares to raise around Rs 25 crore to fund the expansion programme of our manufacturing facility located here. The shares with a face value of Rs 10 would be issued at Rs 35 each,” Mr K.K. Rathi, Managing Director, Rathi Bars Ltd, said.

The issue will open on October 18 and close on October 23. The promoters are looking at diluting around 44 per cent of the stake in the company.

“The company’s current production unit has capability for manufacturing 70,000 tonnes and it has a capacity utilisation of around 90-95 per cent. We plan to raise it to one lakh tonnes per annum,” Mr Anurag Rathi, Director of the company said.

The company has earmarked an investment of Rs 35 crore for purchasing and upgrading equipment. “The public issue would fund the bulk of the expansion and the remaining capital required will be raised from debt and internal accruals,” he added.

Mr Rathi also said the capacity expansion would be in two phases and the first phase would be completed in 6-7 months.

The company had a turnover of Rs 194 crore for the fiscal ended March 31, 2007 with a profit after tax of Rs 6.08 crore. Officials said the company has been witnessing a growth rate of 15-20 per cent in the last couple of years.

Rathi Bars has close to 900 dealers across six states — Delhi, Punjab, Haryana, Rajasthan, Himachal Pradesh and Uttar Pradesh — in the north.