The Hindu Business Line : Aries Agro fixes IPO price band at Rs 120-130

(From right) Dr Jimmy Mirchandani, Joint Managing Director, Aries Agro Ltd, with Dr Rahul Mirchandani, Executive Director, Aries Agro Ltd, at a press conference to announce the company’s IPO in Mumbai on Monday. —

Our Bureau

Mumbai, Dec. 10 Aries Agro Ltd, a fertiliser manufacturing company, is making a public offer of 45 lakh equity shares to raise Rs 169.05 crore. The price-band is fixed at Rs 120-130 per share.

The promoter group, owned by the Mirchandani’s will make an equity dilution from 76.97 per cent to 50.33 per cent in public offering to raise the required capital.

The proceeds of the IPO will be used for setting up four new manufacturing units in Ahemdabad, Lucknow, Medak (Andhra Pradesh), and in Maharashtra. Each plant would be set up at a cost of Rs 2-2.5 crore. The company already has four existing manufacturing units.

In order to reach out to the farmers in remote areas, the company plans to invest in acquiring 100 trucks for a mobile marketing operation.

Mobile marketing will reduce the cost for the farmer and yet receive credit service from the distributor, said Mr Rahul Mirchandani, Executive Director of the company.

West Asia foray

The company will also acquire 75 per cent stake with an investment of Rs 7.5 crore in Golden Harvest Middle East, a trading company incorporated in West Asia.

“Today the import of raw material attracts 35 per cent plus duty. Post the investment in Golden Harvest we seek to make the fertiliser there and import the finished goods, which will then attract only 5 percent duty,” said Mr Mirchandani. The rest of the proceeds will be used to meet working capital, corporate expenses, issue and listing expenses.

The paid-up capital of the company prior to the issue is Rs 8.50 crore and it will be Rs 13 crore post issue.

While the face value is Rs 10, the issue opens on December 14 and closes on December 19. SREI Capital Market Ltd is the book running lead managers.