Ceramics player Lexus Granito turns to SME platform to raise funds

In a big push for Morbi's ceramics cluster, the tiles and ceramics players are unlocking the financial potential by turning to SME IPO for fund raising. Morbi-based Lexus Granito (India) Ltd has proposed an Initial Public Offer on NSE's Emerge platform to raise Rs 25.92 crore essentially aimed at meeting the working capital requirements.

The company, having a turnover of Rs 165 crore for 2016-17 is the first from the ceramics cluster to get listed on the junior bourse. The company's IPO opened for subscription on August 9 and closes on August 11. The company proposed an IPO for 57.60 lakh equity shares with 30 per cent allocation to QIBs.

According to Anilkumar Detroja, Managing Director, Lexus Granito India Ltd, the IPO would help the company to meet its working capital requirement and earn a reputation of a listed entity for its overseas customers.

"This (IPO) will help us materialise our vision of becoming a Rs 350 crore company by 2018-19. Also, being on SME platform will give us a professional recognition and help us position well in the competition," said Detroja adding that the company has already expanded manufacturing capacity to 123 lakh square-feet per month from 55 lakh sqft earlier.

Detroja expects to fully realise the benefit from the expanded capacity by next year, which will get reflected in the company's turnover.

Lexus Granito has been catering to both domestic and international markets. The revenue from export operations contributed 64.49 per cent to the total revenues for the year ended March 31, 2017. Currently, the company exports to nearly 20 countries including Saudi Arabia, Mexico, Kuwait, Oman, UK, US among others.

Detroja further maintained that the market factors are favourable to the ceramics industry in Gujarat as GST has streamlined operations and provided advantage in the form of input tax credit, which was not available in the earlier three-layered tax structure with Central Excise, CST and VAT.

"After a long period of slackness, we are now looking at a promising future," said Detroja. The IPO is being managed by the leading merchant banker of SME Capital Markets, Pantomath Capital Advisors Pvt Led. Pantomath has listed 46 Companies on SME bourses which is the highest number of SME IPOs managed by any merchant banker.