Uttam Mills announces IPO to part finance Rs 286 cr expansion plan

New Delhi, Mar 13 (UNI) Uttam Sugar Mills Ltd today announced it would be entering the capital market with 40 lakh equity shares of Rs 10 each through a 100 per cent book-building process, to part-finance its Rs 286 crore expansion plans.

The price band has been fixed at Rs 290 to Rs 340 as a result of which the issue size is estimated at Rs 116-136 crore. The issue will remain open from March 16 to 21.

A minimum of 60 per cent of the issue will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs), five per cent of which will be specificially reserved for Mutual Funds.

Further, upto 10 per cent of the issue shall be available for allocation on a proportionate basis to Non-Institutional Buyers and upto 30 per cent will be available to Retail Individual Bidders.

The expansion project which involves an investment of Rs 286 crore, proposed to be funded through equity includes setting up of two sugar units for manufacturing premium white sugar with a capacity of 4,500 Tonne Crushed per Day (TCD) as well as a co-generation facility of 15 MW of power at Khaikheri village, and 5,000 TCD along with co-generation facility of 30 MW of power at Shermau village, both in Uttar Pradesh.

''So far 20 crore has already been invested in the project, including supplies and land costs, Uttam Sugar Mills Ltd Chairman and MD Rajkumar Adlakha told reporters here adding ''we hope to complete the project by November this year before the crushing season.'' He further added that ''production capacity after the expansion will increase to 22,750 TCD with co-generation capacity of 81 MW.'' The Libberheri unit is eligible for income tax deduction under section 80-IC and exemption from excise duty for 10 years starting December 2004.

The company has commissioned the Barkatpur facility for 3,500 TCD and 10 MW of power as their first phase of expansion in December 2005. Phase II at the same location is under implementation and is proposed to be commissioned later this month.

Single sulphation and re-melt clarification process will be used by the units enabling them to produce better quality sugar compared to sugar produced by using conventional double sulphitation process.

Mr Adlakha while informing that the company had obtained the licence for production of ethanol and extra-neutral alcohol said ''we will manufacture whatever is more profitabile''.

The net profit of the company for the 12 months ended September 2005 was Rs 26.71 crore.

UNI RA SD KN1526