Gwalior Chemical to aggregate Rs 80 crore from IPO for expansion

New Delhi, Sep 7 (UNI) Niche speciality chemicals major Gwalior Chemical Industries Ltd (GCIL) is entering the capital market with an initial public offering of equity shares aggregating Rs 80 crore through a 100 per cent book build process for expansion of the current facilities and forward integration.

The price band for the offer has been fixed between Rs 71 and Rs 85 per share of face value of Rs 10.

The issue price is 7.1 times the face value at the lower end of the price band for 1,12,67,606 shares and 8.5 times the face value at the higher end of the price band for 9,41,765 shares.

The issue will open for subscription/bids on September 11 and close on September 14, 2006.

Speaking to reporters at a press conference here today, Mr Ashwin Kothari, Chairman of GCIL, said the company presently has facilties to manufacture the first stage downstream products and intends to further expand into the second stage of value added downstream products like esters which are used in the flavour and fragrance industry.

Of the total offer, upto 50 per cent will be allotted on a proportionate basis to Qualified Institutional Buyers (QIBs), of which 5 per cent is reserved for allocation to mutual funds. Another 15 per cent would be available for allocation on a proporionate basis to non-institutional bidders and the balance 35 per cent will be reserved for allotment on a proportionate basis for retail individual bidders, Mr Kothari said.

The net sales and adjusted profit after tax for fiscal 2006 was Rs 170.63 crore and Rs 15.59 crore respectively as compared to a net sales and adjusted profit after tax of Rs 136 crore and Rs 13.02 crore for fiscal 2005.

GCIL's turnover comprises 69 per cent from domestic sales and 31 per cent from exports.

To strengthen its export drive, the company has incorporated a subsidiary in Antwerp, Belgium. The Belgium subsidiary besides providing marketing support also has storage facilities to cater to the needs of the company customers in Europe.

GCIL is major producer of niche chemical products for agro-chemicals, pharmaceuticals, dye, flavour and fragrance industries.

To cater to growing demand from export and domestic markets, the Company plans to expand its capacities both at Nagda in Madhya Pradesh. Moreover, it is setting up new plant at Nagda and Ankleshwar in Gujarat for producing second stage downstream products including benzyl esters and acid chlorides and a new plant for viscose dye pigments from the proceeds of the present issue.

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