The Hindu Business Line : Kiri Dyes IPO price band fixed at Rs 125-150

Ahmedabad, March 11 The Ahmedabad-based Kiri Dyes and Chemicals Ltd (KDCL), manufacturer and exporters of dyes and dyes intermediates, is entering the capital market with its initial public offering (IPO) of 37.5 lakh equity shares of face value of Rs 10 each, to raise funds for executing its backward integration project for manufacturing three key raw materials for dye intermediates. The shares will be offered at a price-band of Rs 125 to Rs 150 per equity share.

The company has made pre-IPO placement of 12.50 lakh equity shares to an investor, the amount aggregating to Rs 14.44 crore, which the company proposes to utilise towards the objects of the issue, Mr Praveen Kiri, Chairman, and Mr Manish Kiri, Managing Director, told a news conference here today.

The backward integration project is proposed to be located in Vadodara district and will have combined production capacity of 1.80 lakh mtpa. The company is setting up the plant with latest double-absorption technology and a power plant of 2.9 MW capacity, which can run from the steam generated by the sulphuric acid plant. With the implementation of backward integration project for manufacturing of intermediates, the company aims to enhance market share and capitalise on the opportunity for high growth in chemicals and dyes industry with reduction in operating costs, research and development, quality controls, and offer competitive price to domestic and international players, they added.

Product range

The company is, since the last nine years, in the business of manufacturing reactive dyes, also known as Synthetic Organic Dyes (S.O. Dyes) and dye intermediates with its integrated production process. The product range of company caters to textiles, leather, and paint and printing-ink industries. The world market for dyes, pigments and dye intermediates is estimated at about $ 23 billion. Global dyestuff industry has undergone a major shift during the 1990s. The manufacturers in Europe, which dominated the production landscape for more than 100 years, have closed down a significant part of their facilities and shifted them to Asia.

Indian dyestuffs accounted for almost 8 per cent of the global share. The current export of dyes and pigments is in the order of Rs 3,500 crore, the Kiris said. The company has entered into a memorandum of understanding with Zhejiang Lonsen Group Stock Co Ltd in November 2007 to establish a joint venture manufacturing facility in India for the production of reactive dyes.

Lonsen and Kiri will have 60 per cent and 40 per cent equity shares in it respectively.

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