Usher Agro's fixed price IPO comes with a 'safety net'

Mumbai, Aug 29: Agri-processing company Usher Agro Ltd, has come out with an initial public offering (IPO), scheduled to open on September 5, 2006 with an attractive safety net, a first of its kind in the recent times.

Briefing reporter here, Managing Director V K Chaturvedi said today the company is entering the capital market with an IPO of 1,20,12,000 equity shares of Rs 10 each at a premium of Rs 5 aggregating to Rs 18.02 crore.

Interestingly, Mr Chaturvedi pointed out that the safety net in this IPO is being offered by the lead managers to the issue IDBI Capital Market Services, which exemplifies the latter's ''confidence in the Company's performance and its future.'' Under the scheme - which is offered exclusively to resident individual allottees - the safety net will be open for a period of six months from the date of allotment of equity shares in the proposed issue.

The total offer includes a promoters' contribution to the extent of 32 lakh equity shares at the same price of Rs 15 per share aggregating to Rs 4.80 crore. Accordingly, the net offer to public stands reduced to 88.12 lakh equity shares.

Replying to a question, Mr Chaturvedi said the issue price has been fixed at Rs 15 even as the book-value stands at Rs 17 per share and the EPS(earning per share) at Rs 2.42. The company is raising the funds through this fixed public issue to fund its wheat roller flourmill with the capacity of 250 MT(metric tonnes) at Mathura, which is expected to start its commercial production shortly.

UNI