KPR Mill, a vertically integrated apparel company with operations located at Coimbatore, Sathyamangalam and Tirupur in Tamil Nadu, proposes to enter the capital markets on August 2, 2007 with a public issue of 5,912,100 equity shares of Rs 10 each through a 100% book-building process.
The price band has been fixed at Rs 225 to Rs 265 per equity share of Rs 10 each and the issue closes on August 7, 2007. The issue would constitute 15.69% of the fully diluted post issue paid-up capital of the company.
The book running lead manager to the issue is Kotak Mahindra Capital Company Ltd. and Co-Book Running Lead Manager is ICICI Securities Ltd.
The issue is being made through a 100% book building process wherein at least 60% of the issue shall be allocated on a proportionate basis to qualified institutional buyers (QIBs), out of which 5% shall be available for allocation to mutual funds only. Further not less than 10% of the issue shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 30% 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 company proposes to utilize the net proceeds of the issue to fund plans for expansion of the existing garment facility at Arasur, near Coimbatore; setting up a design studio at Arasur; construction of an additional hostel facility at Arasur; expansion of the processing facility at State Industries Promotion Corporation of Tamil Nadu Limited ("SIPCOT"), Perundurai; investment in a new knitting facility at Arasur; addition of balancing equipments for existing spinning facility at Sathyamangalam and general corporate purposes.
KPR Mill’s operations and facilities enable it to manufacture readymade knitted apparel by spanning various aspects of the apparel production chain, from producing carded and combed cotton yarn and knitted fabric to managing the design, delivery and quality assurance process involved in producing readymade knitted apparel.
During the year ended March 31, 2007, the company exported 99.86% of its readymade knitted apparel directly to international clients, including among others, Carrefour, Penneys (Primark), Pom-tex, C&A, Ethel Austin, Kiabi, Bandos AG, Mother Care, Innovations Club, and Grouppo Industry Moda SPA, and it has more than 1,000 regular domestic clients for yarn and fabric.
The company produced 10.16 million and 11.55 million pieces of readymade knitted apparel during the year ended March 31, 2006 and 2007, respectively. It has a cumulative capacity of 128,064 spindles in four mills, and it manufactured approximately 26,232 and 28,346 metric tons of yarn during the year ended March 31, 2006 and 2007, respectively, which represented capacity utilization of approximately 98% and 98.2% during such periods. It produced 6,147 and 6,734 metric tons of fabric during the same period respectively, which represented capacity utilization of approximately 90% and 80% during such periods.