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Tuesday, October 09, 2007

Rathi Bars plans Rs 25 crore IPO

Iron and steel maker, Rathi Bars will raise Rs 25 crore through initial public offer (IPO) to fund its production capacity expansion plans.

“We will hit the capital market with 71.43 lakh equity shares to raise about Rs 25 crore to fund our production capacity expansion programmes,” Rathi Bars Ltd managing director, Mr KK Rathi said.

The shares with a face value of Rs 10 each would be issued at Rs 35, he said. The issue would open on 18 October and close on 23 October.

“We are going to dilute 44 per cent of promoters holding through this public issue,” Mr Rathi added. The company has a plant here which has a production capacity of 70,000 tons per annum.

“Our present production in the unit is about 70,000 tons per annum and it has a capacity utilisation of 90-95 per cent. We want to increase it to one lakh tons per annum,” Rathi Bars director, Mr Anurag Rathi said.

The company has earmarked an investment of Rs 35 crore for purchasing and upgrading its equipment and other expansion plans. “The public issue will fund the bulk of the expansion programme. The rest of the fund will come from internal accruals and debt market,” he said. The company would expand its production capacity of the current plant only, he said. “We are not going to set up any new plants”, he added.Mr Anurag Rathi further said that production capacity expansion would be in phases and the first phase would be completed in 6-7 months, reports The Statesman.

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