Indian IPO

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Monday, May 07, 2007

NFPIL IPO opens on May 15 with price band at Rs 171-190

Nitin Fire Protection Industries, NFPIL, is entering the capital market with an initial public offer of 33,90,000 Equity Shares of Rs 10 each with an employee reservation of 1,50,000 equity shares for cash at a premium to be decided through the 100% Book-Building Process. The Price Band of the Issue has been fixed between Rs 171 and Rs 190 per equity share. The subscription to the Issue opens on May 15, 2007 and closes on May 18, 2007. The net issue will constitute 25.71% of the post-Issue paid-up capital of the Company.

Of the Net Issue to the public, at least 50% shall be allotted to Qualified Institutional Bidders ("QIBs"), of which 5% shall be reserved for allotment to mutual funds only. Further, not less than 15% of the Offer shall be reserved for allocation to Non-Institutional Bidders and not less than 35% shall be available for allocation to Retail Individual Bidders. The Issue will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

NFPIL is an established player in Fire Protection, Safety and Security Solutions Business as well as Cylinders & Refueling Systems, since more than a decade. Starting from the basic level fire extinguishers to the sophisticated gas based suppression systems for 'mission critical' areas, NFPIL provides a wide and diverse range of product and services, through tie-ups with overseas manufacturers and design innovators. The Company is managed by professionals having experience in Fire Protection and Security solutions as well as Cylinders and Refueling systems.

NFPIL is proposing a Public Issue to set up a high-pressure seamless cylinder plant at the Visakhapatnam Special Economic Zone through investment in their wholly owned subsidiary, Nitin Cylinders Limited (NCL).

The proposed facility will have a capacity to manufacture 5,00, 000 cylinders per annum. In order to derive the commercial benefits of the proposed investment in shortest possible time, the implementation of the project has been divided into two phases with a manufacturing capacity of 250,000 cylinders p.a. in each phase. Accordingly, Mott MacDonald (IMM) has done a feasibility study of the said Project.

The rapid proliferation of malls and multiplexes in India as well as growth in the manufacturing segment, particularly pharmaceuticals and automotive industries has created growth opportunities for security systems. As per the Company's estimates, there are about 360 malls are under construction in various cities and towns. Out of these 225 are being constructed in top seven cities and balance are being constructed in 50 small cities. All these malls will be an opportunity for the companies in the business of Intelligent Building Management Systems.

During the fiscal year 2006-07, NFPIL has recorded a Total Income (Consolidated) of Rs 1,017.11 million and a Net Profit (After Taxation) of Rs 99.86 million as against the Total Income of Rs 726.06 million and a Net Profit of Rs 65.26 million in the previous fiscal 2005-06. As on March 31, 2007 , the Net Worth (Consolidated) of the Company was Rs 341.80 million.

Karvy Investor Services Limited and UTI Securities Limited are the Book Running Lead Managers ("BRLMs") to the Issue.


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