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Surat-based polyester manufacturing company Sumeet Industries plans to raise ₹60 crore through a rights issue. It plans to offer three new equity shares for every seven held by shareholders of the company as on December 18.
The issue, which is priced at ₹24, closes on January 10. The rights issue opened on December 27.
The company will issue 2.48 crore new equity shares to existing investors. The prevailing market rate of the share is about ₹30.
Shankarlal Somani, Chairman, Sumeet Industries, said the company which manufactures pet-chips, POY (partially-oriented yarn), FDY (fully drawn yarn), texturised and carpet yarn, has modified some of its existing production capacity to produce value-added products.
It intends to use the funds raised for augmenting incremental working capital and general corporate purposes.
The man-made fibre polyester is finding new and varied applications across sectors on daily basis from apparel, to furnishing, automotive, sportswear and technical textiles. With no major capacity expansion expected in the near future, Somani said the existing players will benefit from increase in demand which is growing at a CAGR of 8-10 per cent.
Specialised yarn exports from India is also growing steadily with competition from Korea, Taiwan and China coming down, he said.
In the last five years, the company has spent ₹500 crore for backward integration.
The company’s debt stood at ₹174 crore as of September quarter.
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