Malu Paper Mills announces IPO to open on March 6

Nagpur, Mar 4 (UNI) The Malu Paper Mills limited, a major in manufacturing newsprint and kraft paper in Central India, today announced its maiden IPO for 66,67,000 equity shares of Rs 10 each at a premium of Rs 20 per share.

Company managing director Punamchand Malu told newspersons that the issue would open on March six and close on March 10. The issue price of Rs 30 per share was three times the face value and the shares of the Company would be listed on both the BSE and NSE.

The promoters have also participated in the issue at the issue price of Rs 30 to the extent of 16,67,000 equity shares and the above issue is excluding the promoters contribution. There is a reservation of 500,000 equity shares for NRIs and FIIs on proportionate basis and 500,000 equity shares for Indian mutual funds, Indian multilateral and development financial institutions and scheduled commercial banks on a proportionate basis.

Net offer to the public constitutes 56,67,000 equity shares wherein a minimum of 50 per cent will be provided for retail individaul investors and maximum of 50 per cent for other category of investors.

The Company will utilize the proceeds of this issue to part finance setting up of a new unit at nagpur to produce 49,500 tpa (150 tpd) of newsprint and writing and printing paper along with 6 MW captive co-generation power plant. The total investment for this project is estimated at Rs 70 crore. The Company has raised Rs 45 crore through term loans from banks to fund the project. The project is appraised and monitored by the UTI Bank.

The company would manufacture premium quality newsprint by recycling waste paper with the new generation de-inking method. The Company has already placed orders for a state-of-the-art de-inking plant from Andritz of Finland. The total capacity of newsprint and kraft paper after the proposed expansion shall be 77550 tpa.

The revenues of the Company has shown steady growth and the it achieved a turnover of Rs 40.67 crore for the nine-month period ended December 31, 2005, as against Rs 48.98 crore for the year ended March 31, 2005. The Company has reported a PAT of Rs 2.59 crore for the nine-month period ended December 31, 2005, as against Rs 2.64 crore for the year ended March 31, 2005.

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