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Tuesday, January 03, 2006

Nitin Spinners IPO opens on Jan 6

Nitin Spinners, a 100% EOU, proposes to enter the capital market on January 06, 2006 with an issue of Rs 49 crore (Rs 490 million) through book building process, according to a release.

The issue closes on January 12, 2006. The price band has been fixed at Rs 18- 21 per equity share of Rs 10 each.

Out of the total issue size of Rs 49 crore (Rs 490 million), Rs 9 crore (Rs 90 million) is the promoters contribution. There is a reservation for the permanent employees of the company for cash aggregating Rs 2.50 crore (Rs 25 million) and net issue to public is Rs 37.50 crore (Rs 375 million).

The company is implementing a project of Rs 150 crore (Rs 1.50 billion), which is appraised by Industrial Development Bank of India, IDBI. The means of finance includes Rupee Term Loans aggregating Rs 83.50 crore (Rs 835 million) sanctioned by IDBI, Oriental Bank of Commerce, Punjab National Bank, Indian Overseas Bank and The Bank of Rajasthan; internal accruals aggregating Rs 15 crore (Rs 150 million) and unsecured loans from promoters aggregating Rs 2.50 crore (Rs 25 million).

Nitin Spinners, a Bhilwara (Rajasthan) based textile company is engaged in manufacturing of combed and carded cotton yarns ranging from Ne 4 to 40 in single and multifold and knitted fabrics. These yarns are suitable for applications such as apparels, undergarments, terry towels, denims, medical fabrics, furnishing fabrics and industrial fabrics.

The company is exporting cotton yarns and knitted fabrics to countries like Australia, Bahrain, China, Colombia, Egypt, Israel, Italy, Korea, Mauritius, Russia, Poland, UK, USA and others. At present, its exports are restricted to around 18-20 countries only, which leaves more scope for company to develop new markets and to increase presence accordingly.

The company is promoted by R L Nolkha and his two sons Dinesh Nolkha and Nitin Nolakha.

The total income of the company has jumped from Rs 60.50 crore (Rs 605 million) in 2002-03 to Rs 81.74 crore (Rs 817.4 million) in 2004-05 and the net profit during the same period has gone up from Rs 1.21 crore (Rs 12.1 million) to Rs 2.88 crore (Rs 28.8 million). During the first half ended September 30, 2005 the total income was Rs 49.67 crore (Rs 496.7 million) against a net profit of Rs 3 crore (30 million).

UTI Securities is the book running lead manager to the issue and IDBI Capital Market Services is the co-book running lead manager to the issue. Bigshare Services is the registrar to the issue.

The equity shares of the company are proposed to be listed on Bombay Stock Exchange and National Stock Exchange of India.


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