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Thursday, July 12, 2007

Kaveri Seed files DRHP, to raise Rs 100cr via IPO

Kaveri Seed Company, a Secunderabad-based seed processing and selling firm, has filed a draft red herring prospectus (DRHP) with market regulator Sebi for its planned entry into the capital market early September to raise approximately Rs 100 crore.

The issue proceeds would be utilized to meet the working capital requirement and setting up new plants like corn cob drying plant in Andhra Pradesh, Bio Technology lab in Gundla Pochampally near Hyderabad and seed processing plant in Hyderabad. Apart from that the company is also planning to upgrade existing seed processing facilities in Karnataka and Andhra Pradesh.

"We are focussing small and medium farmers who own not more than 3 acres of land as they are in dire need to raise yield. Hence, we help them achieve 10-15% more yield than their usual output," C Mithun, director, Kaveri Seed Company, said.

We are planning to enter into north market with similar objective, Mithun added.

The company presently sells to customers in Karnataka, Tamil Nadu, Maharashtra and Andhra Pradesh and is now planning to enter Bihar, Madhya Pradesh, Gujarat, Uttar Pradesh, Punjab, Haryana and Rajasthan.

Drought-prone Rajasthan is our major focus for corn, sorghum, bajra and sunflower seeds while we are introducing cotton, too, in other states, Sharad Deshpande, GM, Kaveri Seed Company, said.

The company obtained licence to sell Monsanto seeds this year.

Corn would account for the majority of the company's seed sales especially in states like Bihar, UP and MP for which it is in the process of setting up a corn cob drying plant with the aim of improving germination, vigour and viability of the seeds. This would result in improved quality and quantity of the yield, reports Business Standard.

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