Shree Karni Fabcom, one of the leading producers of specialised technical textiles, plans to raise ₹42 crore through initial public offering by listing on the NSE Emerge platform. The company offers 18.72 lakh shares at a price band of ₹220-227 a piece and lot size of 600 equity shares. The IPO will open for retail investors on March 6.
The company intends to use the IPO proceeds for setting up a dyeing unit and purchase of a new backpack manufacturing unit at Surat in Gujarat. Funds will also be allocated to meet working capital requirements and general corporate expenses.
The company supplies specialised clothes to leading brands and luggage manufacturers such as Samsonite, VIP, Hindesign, Safari, Bata, Tommy Hilfiger, Dell, Swiss Military and Khadim.
Last leg
Rajiv Lakhotia, Managing Director of Shree Karni Fabcom, said putting up the dyeing unit will be the last leg of investment in achieving complete integration of operations and this will improve the cost competitiveness of the company multi-fold besides opening up an opportunity to tap the global markets. The venture into soft luggage manufacturing helps the company cater to third party orders and tap the market directly with its own brand name, he added.
The company has a debt of ₹90 crore. Of this, term loan accounts for ₹32 crore at interest rate of 3.5 per cent with capital subsidiary of ₹6 crore, promoters have extended credit of ₹24 crore and rest from other sources. “The debt level is very comfortable and the promoters have plans to convert the loan extended to the company into equity in next 2-3 years,” he added.
The Book Running Lead Manager to the issue is Horizon Management and MAS Services is the Registrar.