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Friday, May 04, 2007

Asahi Songwon plans Rs 33.5cr IPO; price band at Rs 90-108

Asahi Songwon Colors (ASCL), a manufacturer of pigments, proposes to enter the capital market with an initial public offering, IPO of Rs 33.5 crore. The issue, which is being made through a 100% book building process will open on May 9 and close on May 15.

The price band has been fixed at Rs 90-Rs 108 per equity share.

The company manufactures CPC Blue Crude and Pigment Green and has an installed capacity of 3,600 tonnes per annum and 1,200 tonnes per annum, respectively. The proceeds of the issue will be utilised to part finance the company's expansion plan of Rs 52 crore, which includes increasing the CPC Crude capacity to 10,800 MPTA, setting up a 1200 MPTA Pigment Beta Blue manufacturing facility and a 2 MW captive power plant.

DIC investments

Japan-based Dainippon Ink and Chemicals (DIC) has recently invested Rs 10.5 crore on acquiring 8,65,200 equity shares of ASCL for Rs 122 per share. DIC would hold around 7.5% stake in the company after the IPO.

The balance cost of the project is being funded by a term loan of Rs 8 crore from SBI Bank. Post issue, the promoters stake will come down to 59-60%.

"We are concentrating on exports. More than 90% of our topline comes from exports," said Gokul Jaykrishna, executive director, Asahi Songwon Colors.

The expansion (except the power plant) is expected to be completed by November 2007 while the power plant will be installed by March 2008.

Fortune Financial Services is the book running lead manager to the issue, reports The Hindu Business Line.

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