Indus Fila, engaged in yarn dyeing, fabric weaving, fabric processing and apparel manufacturing, proposes to enter the capital market on February 12, 2007 with a public issue of 48,43,789 equity shares of Rs 10 each through 100% book building process.
The price band has been fixed at Rs 170 to Rs 185. The issue closes on February 14, 2007. The issue would constitute 25% of the fully diluted post issue paid up capital of the company.
Anand Rathi Securities is the BRLM for the issue and Datamatics Financial Services is the registrar to the issue.
The issue is being made through the 100% book building process wherein up to 50% of the net issue to public shall be allocated to qualified institutional buyers, QIB's on a proportionate basis. Out of the portion available for allocation to the QIB's, 5% will be available for allocation to mutual funds. Mutual fund applicants shall also be eligible for proportionate allocation under the balance available for the QIB's.
Further, not less than 15% of the net issue to public shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the net issue to public shall be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price. The equity shares are proposed to be listed on the BSE and the NSE.
The company proposes to utilize the net proceeds of the issue to part finance its Rs 166.24 crore plan for expansion of capacities in weaving, yarn dyeing and setting up of ``Centre of Excellence'', processing and garmenting. The plan has been appraised by Corporation Bank, Karnataka Bank and UTI Bank for total rupee term loan of Rs 74 crore sanctioned by these banks. The entire rupee term loan is eligible for a 5% interest subsidy under the technology upgradation fund scheme, TUFS. Under the amended provisions of TUFS, the company will also be eligible for an additional incentive of 10% capital subsidy for the specified textile processing machinery.
Indus Fila, the flagship company of the group, is a new age fashion and textile manufacturer with sharp focus on design and backward integration capabilities, thriving under the dynamic leadership of Nitin N Mandhana, the prime mover of the company, supported by two other promoter directors - Shashikant G Mandhana and Prakash G Mandhana. The promoters are from a family, which is associated with the textile industry for a long time.
The company's operational income and profit after tax for the year ended March 31, 2006 is Rs 82.49 crore and Rs 5.49 crore respectively and for the half year ended September 30, 2006 it is Rs 109.18 crore and Rs 10.63 crore respectively. Its operational income and PAT have grown at a CAGR of 99.29% and 147.23% respectively over the period of five years and six months.
Indus Fila has multi-locational production and distribution facilities spread across Bangalore and Mysore, viz. Peenya and Nelamangala in Bangalore, Nanjangud in Mysore fully backed up by the facilities for product development, design studio and efficient sampling infrastructure to provide quality services to its customers in India and abroad. It also has distribution facilities in Chennai and Mumbai, which give it advantage of being able to serve customers from multi-locations.
Presently, it is operating with 156 weaving looms (including 48 looms under 100% manufacturing agreement) producing approximately 20.80 million meters of fabric per annum and 750 sewing machines with production capacity of 2.70 million garments per annum.
The company has integrated Design-to-Delivery capability with emphasis on design excellence and innovative product engineering. Its multi-location production facilities spread across Bangalore and Mysore, as per press release.
Its business strategy
* To focus on innovative designing with fully equipped state of art 'plug & play' design facility with good collection of latest design developed in-house for clients to choose from. Centre of Excellence to act as a differentiating factor and will play a vital role in our strategy to offer high end fashion designs and innovative product engineering to customer requirements.
* To expand garment capacity to meet the growing opportunity in the market place and in this process captively consume around 42% of our own production of fabrics.
* To take advantage of the removal of Quota regime by penetrating the regulated markets of EU and US.
* To position ourselves in the mid to high end garment segment such that we enhance our acceptance and improve our capabilities to meet the stringent compliances stipulated by such customers. This shall make way for establishing our own brand in a short time.