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Friday, August 18, 2006

Voltamp to offer 4.88mn shares in IPO at Rs 295-345

Voltamp Transformers, manufacturers of power transformers, distribution transformers and dry transformers, proposes to enter capital market with initial public offering, IPO, of 48,83,840 equity shares of Rs 10 each.

The company set its IPO price band at Rs 295-345 per share.

Issue snapshot

* Net public offer of 46,39,648 equity shares of Rs 10 each
* Employee reservation of 2,44,192 shares
* Primary object of offer to achieve benefits of listing of equity shares
* Company will not receive proceeds from sale of equity shares by selling shareholders

Promoter holding

* Promoter holding post-issue - 43.67%
* Promoter group holding post-issue - 51.73%

About company

* Manufacturers of power transformers, distribution transformers and dry transformers
* Cater to petrochemical, oil refining, cement, pharmaceuticals, automobiles, steel, power plant, building, metro rail applications
* Focused on manufacturing transformers catering to engineering and industrial segments
* Have a capacity of 5400 MVA
* Clientele: Reliance Industries, Jindal Steel and contracting firms like Siemens, ABB, Larsen & Toubro, Torrent Power and Suzlon
* Have established nationwide network of 9 branches covering major industrial towns and metropolitan cities to effectively cater to the needs of existing customers and to reach and service potential customers.
* Although, volumes in these segments are lower when compared to State Electricity Boards, SEBs
* Exposure to receivables risk due to the financial ill health of SEBs is low

Concerns

* Attrition rate is rising in the last 3 years: attrition rates were 8.33%, 9.67% and 15.32%
* Few raw materials such as CRGO, copper, oil, insulation, resin, steel constitute over 70% of the sales revenue

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