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Saturday, March 15, 2008

Titagarh Wagons IPO opens on Mar 24, price band Rs 540-610

Titagarh Wagons is entering capital market with an initial public offering, IPO of 24.87 lakh shares, including fresh sale of 3.15 lakh shares by Mrs Savitri Devi and Strategic Ventures Fund (Mauritius), of face value Rs 10 each on March 24. The price band has been fixed at Rs 540 to Rs 610. The issue will close on March 27, 2008.

It is planning to raise approximately Rs 129 crore to Rs 145 crore, out of which the company will get Rs 111.6 crore to Rs 126 crore. Issue will constitute 15% of post issue paid up capital.

Amongst PE investments, Blackstone has picked up a minority interest in Titagarh Wagons for Rs 672 a share, which is the fifth major investor to put money in Titagarh Wagons. Other investors include GE Capital Infrastructure (15%), JP Morgan (5%), 2i Capital (6%) and ChrysCapital (6.5%).

Money raised through this issue will be used for setting up an EMU manufacturing facility at Uttarpara unit, modernising and expanding the existing facilities at Titagarh and Uttarpara units, setting up an axle machining and wheelset assembly facility at Uttarpara unit, constructing a corporate office and a design cum research and development office. Money will also be used for strategic acquisition or investments and brand building exercise and General corporate purposes.

Titagarh Wagons is a leading private sector wagon manufacturer in India. It manufactures railway wagons, Bailey bridges, Heavy Earth Moving and Mining equipment, steel and SG iron castings of moderate to complex configuration etc. It is an Industry Partner to Defence Research and Development Organization, Ministry of Defence, manufactures special purpose wagons, shelters and other engineering equipments for defence.

It is into three broad business lines: a) wagon manufacturing, b) special projects (includes defence, bailey bridges and other fabricated equipment) and c) heavy earth moving and mining equipment division.

Current order book stands at Rs 753.11 crore. Rolling stock division is constituting nearly Rs 669.39 crore as on January 31, 2008.

Its subsidiary Titagarh Biotec Private (holds 98.14%), engaged in cultivating, producing, buying and selling all kinds of agricultural and forests produce. Wagon manufacturing business contributes around 86% of total income. 80% of the Order book for wagons comes from Railway.

Since Fiscal 2003, Sales and PBT CAGR stood at 57% and 76%. Wagon dispatches have increased from 644 wagons in 2003 to 2,073 wagons in Fiscal 2007.

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