Mumbai, Nov. 8
AIA Engineering Ltd, an Ahmedabad-based company, has priced its initial public offering of shares at Rs 275-315 per share.
The company is offering 47 lakh shares of Rs 10 each in the IPO, which is through a book-building process. If fully subscribed, the company would raise Rs 129 crore at the lower end of the price band and Rs 148 crore at the upper end of the band.
The issue opens on November 17 and closes on November 22.
The company has reserved 1.88 lakh shares for its employees. Of the rest, 50 per cent shall be allocated on a proportionate basis to qualified institutional buyers (QIB), 15 per cent to non-institutional buyers and 35 per cent to retail bidders. Of the 50 per cent reserved for QIBs, five per cent is for mutual funds.
The fully paid-up equity capital of the company after the IPO would go up from Rs 13.07 crore to Rs 17.77 crore. The company is a niche player in the value-added high chrome metallurgy segment catering to the cement, mining and thermal power industries.
It specialises in manufacturing mill internals, which are used to carry out grinding operations inside a mill. A mill is used to grind and is used widely in cement industries, thermal power plants and mines. Mill internals include products such as grinding media, liners, diaphragms, and vertical mill parts.
The company will finance new expansion plans from the proceeds of the issue. It proposes to set up an additional manufacturing facility at Changodar, a village near Ahmedabad and augment its capacity to further consolidate its market share.
"The new plant will be fully operational by October-November 2006. However, it will be partly operational by May next year," said Mr Bhadresh Shah, Managing Director, AIA Engineering. "When fully operational our capacity will increase by 46,000 tonnes," he said.
The company has been exporting nearly 45 per cent of its production. Exports are predominantly to Europe and North America. "Our clients include global cement majors such as Holcim of Switzerland, Lafarge of France and Cemex of Mexico," Mr Shah said.
The company has reported a net profit of Rs 21 crore on a net income of Rs 170 crore for the first half of the current fiscal.