The Hindu Business Line : Precision Pipes and Profiles plans IPO to fund expansion

Mr Anuj Jain (left), Director, Precision Pipes and Profiles Company with Mr A. K. Jain, Managing Director, at a press conference in the capital on Tuesday . —

Our Bureau

New Delhi, Dec. 11 Precision Pipes and Profiles Company Ltd, a Delhi-based OEM supplier to the automobile industry, is entering the capital market with an initial public offering (IPO) of 50-lakh shares.

“The price band of the issue has been fixed between Rs 140 and Rs 150 per equity share of face value of Rs 10 each. The bids will open on December 17 and close on December 20,” Mr Ajay Kumar Jain, Managing Director, Precision Pipes and Profiles Company Ltd, said while addressing a press conference here on Tuesday.

Expansion initiatives

The company is hoping to raise around Rs 75 crore from the issue to fund its expansion initiatives. Mr Jain said that of the total equity float, up to 50 per cent of the net issue will be allocated to qualified institutional buyers (QIBs) on a proportionate basis, out of which 5 per cent will be available only to mutual funds. “Fifteen per cent of the net issue shall be available for the allocation on a proportionate basis to non institutional bidders and around 35 per cent will be available to retail individual bidders,” he added.

According to Mr Abhishek Jain, Executive Director of the company, post the issue, the promoter and promoter group holding would be reduced to between 62.69 and 64.29 per cent.

New plant

“The company is currently in the process of increasing its production capabilities from 4.75 million kg to 9.14 million kg by 2008-09.

Apart from this, we are also setting up a new plant for manufacturing of auto components and also a new plant for electrical outlet system products for Power and Data Corporation Pty Ltd, Australia,” he said.

The total investment is expected to be around Rs 106 crore, out of which Rs 75 crore will be from the IPO, Rs 25 crore through term loans and the remaining Rs 6 crore from internal accruals.

The company for the financial year ended March 31, 2007, had a turnover of Rs 109.28 crore compared with Rs 80.35 crore posted during the same period of the previous year.

The net profit for the last financial year was at Rs 13.87 crore compared with Rs 7.99 crore recorded for the financial year ended March 31, 2006.

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