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Thursday, September 27, 2007

Neel Metal Products files IPO papers with SEBI

Neel Metal Products, a part of the JBM group of companies, an integrated steel processing and automotive products manufacturer, has filed its draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (SEBI) to enter the capital market with its initial public offering (IPO) of equity shares.

The company proposes to issue 5,251,000 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process. The equity shares of the company, offered through this IPO, are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.

The issue comprises a net issue to public of 4,988,450 equity shares and a reservation of up to 262,550 equity shares for eligible employees. The issue will constitute 35% of the fully diluted post-issue paid-up equity share capital of the company. The net issue will constitute 33.25% of the fully diluted post-issue equity share capital of the company.

Of the net issue, up to 50% of the issue shall be allocated on a proportionate basis to qualified institutional buyers (QIBs) (including 5% of the QIB portion that would be specifically reserved for mutual funds for allocation on a proportionate basis).

Further, not less than 15% of the issue shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the issue 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 sole book running lead manager to the issue is ICICI Securities Limited.

Neel Metal Products is part of the JBM group of companies, which is a prominent player in the automotive components manufacturing industry in India. The company’s integrated facilities enable it to manufacture a wide spectrum of automotive components, ranging from production of steel blanks, steel tubes, frames for scooters, wheel rims, stamped components and complete fabricated and painted body for three-wheelers. Additionally, the Company designs and manufactures customized equipment such as jigs, fixtures and special purpose welding machines, required for weld-assembly of vehicles, which the Company supplies to original equipment manufacturers (“OEMs”) as well as OEM vendors.

The company’s manufacturing facilities are located at Gurgaon, Haridwar and Pantnagar, each of which is in close proximity to the facilities of the company’s major customers. The facility at Gurgaon contains the Steel Service Center (SSC), tools manufacturing and component manufacturing facilities and has an installed capacity of 170,481.0 MT as of March 31, 2007. The company manufactures the complete welded and painted body for three-wheelers for M&M from the facility at Haridwar.

It had an installed capacity of 60,000 nos. as of March 31, 2007. The Company also manufactures steel tubes for the automotive industry through its facility at Pantnagar. This facility at Pantnagar has commenced production in the first quarter of Fiscal 2008.

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