The Hindu : Business : V-Guard’s public issue opens on Monday

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Sunday, Feb 17, 2008
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Business

V-Guard’s public issue opens on Monday

K. Venkiteswaran

To mop up Rs.68 crore with a price band of Rs. 80-85 per share

HOPES TO SAIL THROUGH: Kochouseph Chittilappilly, Managing Director, V-Guard Industries Ltd, announces the initial public offer, at a press conference in Kochi on Saturday.

Kochi: V-Guard Industries’ initial public offering (IPO) opens on Monday with a price band of Rs.80 to 85 to mop up Rs.68 crore at the upper end of the price band.

Addressing a press conf erence, company managing director Kochouseph Chittilappilly said the net issue to the public comprised 76 lakh equity shares and four lakh equity shares reserved for the employees.

The issue would constitute 26.80 per cent of the fully diluted post issue paid up equity share capital of the company.

The capital raised from the issue would be deployed to set up cable manufacturing facilities in Coimbatore and Uttaranchal, enamelling plant in Coimbatore, development and pilot production plants for water heaters, fans and pumps in Himachal Pradesh and Coimbatore and service and distribution centres in Bangalore, Hubli and Vijayawada.

The idea was to expand the manufacturing capacity so as to attain economies of scale and backward integration. Setting up units in backward areas like Uttaranchal would help in reaping benefits of tax exemptions and also achieve cost efficiency.

The company had a standing of over three decades and a strong dealer network. “V-Guard Industries Limited follows a unique manufacturing model wherein products are sourced from SMEs across south India.

The diversified product base has ensured de-risking of the business model.

The revenue stream comes from diverse domains which in turn reduces the company’s dependence on a particular product,” explains a document.

During 2006-07, V-Guard achieved a total turnover of Rs.222.27 crore and registered a combined annual growth rate of over 19 per cent.

The company has been making profit and paying dividend for the last five years.

The profit after tax of the company has grown from Rs.489.97 lakh on March 2003 to Rs.1,349.69 lakh on March 2007 at a growth rate of over 28 per cent.

The IPO opens on Monday and closes on Thursday.

The shares will be listed on the Bombay Stock Exchange and the National Stock Exchange.

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