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Tuesday, May 09, 2006

Orient Craft to raise Rs 350cr

Leading apparel exporter Orient Craft will come out with an initial public offer, IPO later this year to raise about Rs 350 crore (3.5 billion) to fund expansion plans and will set up a Special Economic Zone (SEZ) in Gurgaon, reports The Economic Times.

"We are in the process of finalising the IPO and have appointed Kotak Mahindra as merchant banker," said, OCL Chairman and managing director Sudhir Dhingra.

Dhingra said the company will expand facilities and build infrastructure as part of growth plans. "Part of the money raised through the IPO will be used for setting up new facilities over the next two years," he added.

The company plans to invest Rs 200 crore for setting up new facilities in the National Capital Region. It already has 23 facilities in the area and manufactures 30 lakh garments in a month.

On the company's SEZ plans, Dhingra said it will be a 600-acre textile SEZ with an expected investment of Rs 2,000 crore (20 billion).

"We have already bought 400 acres and the rest will be purchased in a couple of months," he said, adding that the company will initially invest Rs 300-400 crore to set up manufacturing units in the proposed SEZ.

OCL is also "seriously contemplating" entering the domestic market. "We would enter the domestic market in collaboration with foreign brands this year," Dhingra said. Orient Craft is in talks with 3-4 international brands from the US and Europe who are currently not represented in India.

The company had a net profit of Rs 27 crore (270 million) in 2005-06 which it hopes will touch Rs 64 crore (640 million) this fiscal. Top line in the fiscal ending March 31, 2006, stood at Rs 745 crore (7.45 billion) and it expects this to rise to Rs 1,000 crore (10 billion) in 2006-07.


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