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Wednesday, October 25, 2006

Metro Tyres to issue IPO of Rs 100cr

Eyeing to increase its share in the indigenous and international markets, Metro Tyres is set for expansion with an initial public offering, IPO of Rs 100 crore (Rs 1 billion) for enhancing production at two-wheeler tyre-manufacturing units in Ludhiana, reports Business Standard.

Since the demand for two-wheeler tyres had gone up tremendously in the past few years in the country due to increase in the sale of motorbikes, the time was ripe for the company to increase production to meet the demand, company sources said, stating that an IPO of at least Rs 100 crore had been planned

Sources said the company had planned to increase production at its four production facilities in Ludhiana and increase the production of its “Metro Continental” tyres from 25,000 to 50,000 pieces per month, for which Rs 10 crore had been earmarked.

Metro is targeting producing 1,00,000 tyres more by the end of the year and it is considering setting up a manufacturing facility for this.

The Metro Continental brand of tyres are manufactured at one of the company’s high-tech plants in Ludhiana with state-of-the-art technology provided by Continental AG of Germany and the company had invested Rs 40 crore in this unit, sources said.

Part of the machinery for this plant has come from Continental and the rest is being sourced from other leading manufacturers abroad.

“We have four manufacturing plants in Ludhiana, one in Gurgaon and one in Noida. All our Ludhiana units have the capacity to produce 1,00,000 two-wheeler tyres and tubes a day,” said Rummy Chhabra, managing director of Metro Tyres.

“We manufacture bicycle tyres in Ludhiana and Gurgaon, apart from 30,000 motorcycle tyres a month, whose capacity will now be increased to 1,00,000 tyres per month after our investment of Rs 10 crore,” he said.

The company produces 3 million tyres every month, and it has a 10% market share, he added.

“We are working on modalities to expand over manufacturing facilities. We have become the country’s first two-wheeler tyre manufacturer to obtain the Economic Commission for Europe, ECE approval for exporting motorcycle tyres and have started dispatching to Continental,” he said.

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