Sanghvi Forging and Engineering (SFE) Ltd on Tuesday said it expects to raise Rs 36.90 crore through its initial public offering (IPO) opening tomorrow.

The company has fixed a price band of its IPO between Rs 80 and Rs 85. The issue opens for subscription on May 4 and closes on May 6 for QIB investors and on May 9 for the non-institutional investors (NII) and retail bidders.

The company is diluting 37 per cent of its stake through the IPO. “We are expanding the capacity of our 4 metric tonne (MT) single forging unit. A project with single piece forging capacity of 40 MT will be set up at an investment of Rs 120 crore,” SFE Director of International Sales Mr Naresh Sanghvi told PTI.

The company is an approved global vendor of General Electric (GE) and it has obtained an approval of Mazagaon Dock, a GoI enterprise manufacturing submarines and vessels for defence, and Kuwait National Petroleum Corporation, he added.

“The company has secured term loan of Rs 50 crore and Rs 22 crore from the State Bank of India and Bank of Baroda, respectively for the project, while Rs 36.90 crore shall be raised through this IPO to part finance the project,” Mr Sanghvi said.

“In a pre—IPO placement, the company has sold close to seven lakh equity shares at Rs 80 per piece to a German company Dango & Dinethal Mascinenbau (GMBH), with the lock in period of one year,” he said.

The company turnover stood at Rs 29.50 crore in the third quarter of 2010—11 ending December, of which 20 per cent accounts for exports. It reported a profit after tax (PAT) of Rs 3 crore.

The company will begin manufacturing critical products like rotors for turbine, tube sheets for oil and gas, shafts for ship building, shafts for heavy engineering, which currently are being imported from Korea, Italy and Japan, Mr Sanghvi said.

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