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Saturday, January 07, 2006

Sree Sakthi Paper Mills IPO opens on Jan 17

Sree Sakthi Paper Mills, engaged in the manufacturing of kraft paper and duplex board, is entering the capital market on January 17, 2006 with an IPO of 83,33,340 equity shares of Rs 10 each for cash at a premium of Rs 20 per share (issue price Rs 30 per share) aggregating Rs 25 crore (Rs 250 million), according to a release.

The issue price is 3 times the face value of the equity share. The issue closes on January 21, 2006.

Out of this public issue, 8,33,340 equity shares are reserved for allotment to NRI's and FIIs and 8,33,340 equity shares are reserved for allotment to banks, mutual funds and financial institutions, leaving a net issue to the public of 66,66,672 equity shares.

Keynote Corporate Services is the lead manager to the issue and Bigshare Services is the registrar.

The company is coming out with this issue mainly to fund its plans for expansion of the capacity from 140 TPD to 240 TPD and also to set up a 2 MW cogeneration power plant with an investment of Rs 26.55 crore (Rs 265.5 million).

The company's performance during past 5 years shows that its total income has gone up from Rs 36.65 crore (Rs 366.5 million) in 2000-01 to Rs 50.55 crore (Rs 505.5 million) in 2004-05 and profit before adjustments has jumped from Rs 16.51 lakh to Rs 1.09 crore (Rs 10.9 million) during the corresponding period. For the six month ended September 30, 2005, the total income of the company was Rs 31.12 crore (Rs 311.2 million) and PAT of Rs 84.31 lakh.

Sree Sakthi Paper Mills, SSPML, was incorporated in the year 1991 with an installed capacity to produce 15 tonnes of kraft paper per day. It graduated to a combined manufacturing capacity of 140 TPD of kraft paper and duplex board at two of its plants in Edyar and Chalakudy in Kerala. Both the plants are capable of producing together 40,000 MT per annum as on date.

SSPML is now planning to expand its activities by enhancing its capacity of kraft paper to meet growing demand from its customers and to emerge as one of the bigger players in South India.

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