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Saturday, September 01, 2007

Kaveri Seed IPO opens on Sept 6, to raise Rs 68cr

Kaveri Seed Company, one of the few recognized agri-input companies in India, proposes to enter the capital markets on September 6, 2007 with a public issue of 40,00,000 equity shares of Rs 10 each through 100% book building process. The issue closes on September 11, 2007 and the price band has been fixed at Rs 150 to Rs 170.

The company proposes to raise Rs 60 crore in the lower end of band and Rs 68 crore at the higher end of band.

The net issue to the public will be 38,00,000 equity shares after allowing for reservation of 2,00,000 equity shares for eligible employees. The issue will constitute 29.20% and the net issue will constitute 27.74% of the fully diluted post issue paid-up capital of the company.

Anand Rathi Securities, Sobhagya Capital Options and SREI Capital Markets are the BRLMs for the issue.

The company proposes to utilize the net proceeds of the issue for acquisition of farmland for R&D near Hyderabad, Alwar and Ahmedabad, setting up marketing offices and godowns in Delhi, Lucknow, Jaipur, Ahmedabad and Aurangabad, setting up of corn cobdrying plants in Andhra Pradesh and Karnataka, setting up of a biotechnology lab near Hyderabad, upgradation of existing seed processing plants at Kandalkoi, Gundla Pochampally, Gatla Narsingapur and Bellary and setting up of a seed processing plant near Hyderabad.

``Our focus is to be a leading provider of crop solutions to the farmer by supplying high yielding hybrid seeds and crop management namely micronutrients, bioproducts etc. For achieving this, we are engaging in research and development efforts in the areas of superior breeding programmes and biotechnology tools that will enable us to develop highly effective and differentiated hybrid seeds, micronutrients and bioproducts," says Mr Gundavaram Venkata Bhaskar Rao, Chairman and Managing Director of the company.

Kaveri Seed Company is mainly into the business of research, production, processing and marketing of high quality hybrid seeds for different crops like corn, sunflower, cotton, pearlmillet, paddy, grain sorghum etc. and has recently forayed into micronutrients and bioproducts.

The company's total income has gone up from Rs 2364 lakh in 2002-03 to Rs 4972 lakh in 2005-06 and PAT is up from Rs 13.41 lakh to Rs 293 lakh respectively. During 2006-07, the company has recorded PAT of Rs 1053 lakh on total income of Rs.6723 lakh.

The Indian seed market is among the top ten largest in the world, estimated to be about USD1 billion in 2005. (Source: ISF Secretariat)

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