Richa Knits offers 90 lakh shares to aggregate Rs 27 crore

New Delhi, Sep 5 (UNI) Integrated textile company Richa Knits Ltd (RKL) is entering the capital market with an initial public offering (IPO) through a fixed price issue of 90,00,000 equity shares of Rs 10 each for cash at a price of Rs 30 per equity share aggregating Rs 27 crore.

The public issue is aimed at part-financing of expansion capability in all the existing segments of the company namely Knitting, Dyeing and Processing and Garment manufacturing. A Rs 63 crore expansion project of the company is appraised by Indian Overseas Bank and funded by way of a Term Loan of Rs 33 crore.

The issue comprises of a Promoters participation of 15,00,000 equity shares at the price of Rs 30 per share, 7,50,000 each equity shares for Qualified Institutional Bidders (QIBs) and NRI and FII portion, 3,75,000 equity shares reserved for employees and Net Issue to the public is 56,25,000 equity shares at the price of Rs 30 per share.

For the offer price of Rs 30 per share -- Rs 15 per share on application and Rs 15 per share on allotment and minimum lot is set at 180 equity shares and multiples of 180 equity shares thereafter.

For the balance investment, Rs 3 crore would be arranged from internal accruals of the company.

The issue is scheduled to open for public subscription on September 13 and closes on September 19, 2006.

Speaking to reporters at a press conference here today, RKL Managing Director Sushil Gupta said, ''It would be gigantic step after the expansion for Richa Knits to carve a niche in the export segment coupled with tangible presence in the domestic market. The aim is to provide its consumers with best innovative product at the most affordable prices without compromising on the quality.'' Mr Gupta said the objective of the issue is to set up a new unit for processing and dyeing with a capacity of 3960 tonnes per annum (TPA) at village Tapukara, Alwar, Rajasthan, setting up of new unit for knitting with a capacity of 480 TPA at the existing location in Gurgaon and to enhance existing capacity for garmenting by 18 lakhs prices per annum at existing unit located at the new location also in Gurgaon, Haryana and also to augment need-based long-term working capital requirement and to meet the issue expenses of the Company.

The company turnover has gone up from Rs 3.70 crore in 2001 to Rs 45.5 crore in 2006, indicating a CAGR of over 60 per cent over the last 5 years while the exports have increased from 1.41 crore in 2003 to Rs 6.84 crore in 2006.

The company has ventured into the domestic market with its own leisure-wear brand ''AVO-CADO''. It has three operational Exclusive Business Outlets at Faridabad, Gurgaon and Jaipur and has a network of 6 distributors and over 100 dealers catering to 7 states of Northern India, Mr Gupta said.

RKL is one of the premier multi-divisional integrated textile company and has the facilities for knitting of fabric, dyeing and processing of knitted fabrics and manufacture of garments for domestic and export market.

The company has a state of the art laboratory facility for developing shades, fastness of colour, fabric quality and adopts stringent quality checks at each step of manufacturing process.

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