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Tuesday, August 29, 2006

ACE IPO opens on Sept 1, price band at Rs 110-130

Action Construction Equipment, ACE, an established manufacturer of mobile cranes, mobile tower cranes and construction equipment in India, proposes to enter the capital market on September 1, 2006 with a public issue of 46,00,000 equity shares of Rs 10 each in the price band of Rs 110-130 per equity share, as per press release.

The issue closes on September 7, 2006. The net issue to the public would constitute 25.03% of the fully diluted post issue paid-up capital of the company.

The issue is being made through the 100% voluntary book building process wherein not more than 50% of the net offer to the public shall be available for allocation to qualified institutional buyers, QIB's on a proportionate basis (out of which 5% shall be allocated proportionately to mutual funds. Mutual fund applicants shall also be eligible for proportionate allocation under the balance available for QIB).

Further, not less than 15% of the net offer to the public shall be available for allocation on a proportionate basis to non institutional bidders and not less than 35% of the net offer to the public shall be available for allocation on a proportionate basis to retail bidders, subject to valid bids being received at or above the issue price. Further, there is reservation for the employees of the company to the extent of 1,00,000 equity shares which would be allotted on the proportionate basis. The company has not opted for grading of this issue.

The equity shares are proposed to be listed on BSE and NSE.

The Action Construction Equipment proposes to invest part of the net proceeds of the issue to set up a new plant for manufacturing loaders, higher capacity tower cranes and construction equipment along with expansion and modernization of the existing capacities and facilities. The plan also covers setting up of a joint venture with Tigieffe SRL of Italy and setting up a corporate office and R&D center. ACE also proposes to utilize part of the funds for acquisition and investment as also working capital requirement.

Karvy Investors Services and UTI Securities are the BRLMs for the issue and Karvy Computershare is the registrar.

ACE is a decade old enterprise and started with manufacturing of Hydraulic Mobile Cranes of different capacities under the brand name of "ACE" at industrial township of Faridabad. The company is an established manufacturer of Hydraulic Mobile Cranes, Mobile Tower Cranes and Construction Equipment in the country existing since more than a decade and enjoys a consolidated presence in all major Infrastructure, Construction, Heavy Engineering and Industrial Projects throughout the country. The Company is dedicated to provide its customers with latest technology construction equipment and efficient sales and after sales service aimed at satisfying their real needs.

The company has shown a consistent growth in operations and profitability in the last five years. From a turnover of Rs 10.79 crore (Rs 107.9 million) in the financial year 2001-02, the company has achieved a turnover of Rs 165.68 crore (Rs 1.65 billion) in the financial year 2005-06. The sales turnover of the company has grown at a CAGR of 96.86% in a span of last four years. The net profit has also gone up from Rs 5.15 lakh in 2001-02 to Rs 4.05 crore (Rs 40.5 million) in 2004-05 and further to Rs 13.01 crore (Rs 130.1 million) in FY 2005-06. For the first quarter of the current year ended June 30, 2006, the company has achieved net sales of Rs 49.13 crore (Rs 491.3 million) and net profit of Rs 3.96 crore (Rs 39.6 million).

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