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Monday, September 11, 2006

Gwalior Chem IPO opens for subscription today

Gwalior Chemical Industries, GCIL, a producer of niche chemical products for agro-chemicals, pharmaceuticals, dye, flavour and fragrance industries, is open for subscription with an initial public offering, IPO of equity shares aggregating to Rs 80 crore (Rs 800 million) through a 100% book build process.

The price band for the offer has been fixed between Rs 71 and Rs 85 per share. The issue closes on September 14, 2006.

Of the total offer, upto 50% will be allotted on a proportionate basis to qualified institutional buyers, QIBs, of which 5% is reserved for allocation to mutual funds. Another 15% would be available for allocation on a proportionate basis to non-institutional bidders and the balance 35% will be reserved for allotment on a proportionate basis for retail individual bidders.

About the company

GCIL is an integrated facility at Nagda, Madhya Pradesh and Ankleshwar, Gujarat to manufacture chlorinated compounds and their derivatives. The range of chlorinated compounds includes chlorotoluene range and sulphur chlorides range. In the chlorotoluene range the three primary products are benzyl chloride, benzal chloride and benzo trichloride. Moreover, the company also manufactured black viscose dye.

In the sulphur chloride range, the main products manufactured by the company include thionyl chloride and sulphuryl chloride having varied applications. The company has drawn up plans to further expand into acid chlorides, which are value added downstream products of thionyl chloride.

The net sales and adjusted profit after tax for fiscal 2006 was Rs 170.63 crore (Rs 1.70 billion) and Rs 15.59 crore (Rs 155.9 million) respectively as compared to a net sales and adjusted profit after tax of Rs 136 crore (Rs 1.36 billion) and Rs 13.02 crore (Rs 130.2 million) for fiscal 2005.

To cater to growing demand from export markets and the domestic market, the company has plans to expand its capacities both at Nagda. Moreover, the company is also setting up new plant at Nagda and Ankleshwar for producing second stage downstream products including benzyl esters and acid chlorides and a new plant for viscose dye pigments from the proceeds of the present issue.

JM Morgan Stanley Private Limited is the sole book running lead manager to the issue.

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