Ruchira Papers to enter capital market on Nov 23

Chandigarh, Nov 02 (UNI) Ruchira Papers Ltd, a leading agro-based Kraft paper manufacturing company, will enter the capital market with a public issue to raise Rs 28.50 crore through 100 per cent book building process.

The issue opens on November 23 and closes on November 29.

Addressing the media persons here today, Whole Time Director Jatinder Singh said,''The company is planning expansion and is now setting up a new manufacturing plant with 33,000 tonnes per annum (TPA) capacity to manufacture writing and printing paper including a chemical recovery plant and a six MW captive power co-generation plant.'' This would result in substantial reduction in cost of production and after expansion, the total capacity would increase to 85,800 TPA from 52,800 TPA at present, he added.

The project has been appraised by Punjab National Bank, who would be the monitoring agency, post issue.

Punjab National Bank and A K Capital Services Ltd are the BRLMs.

Mr Singh informed, ''The project is funded by consortium of bankers to the extent of Rs 93.48 crore out of total cost of Rs 137.98 crore. The promoters are making a contribution of Rs five crore by capital subscription.

Funds to the extent of Rs 12 crore are being raised through internal accruals. The balance funds of Rs 23.50 crore are being raised through the public issue.'' ''Ruchira would be amongst the top 15 paper mills in the organized sector in India, after the proposed expansion, which is likely to go on full steam by June 2007'', he added.

The plant, which is located at Kala-Amb in Himachal Pradesh and is eligible for various tax benefits like 100 per cent excise duty exemption upto year 2013. Income Tax exemption to the extent of 100 per cent for first five years and thereafter exemption upto 30 per cent for next five years.

The company is eligible for confessional rate of sales tax @ one per cent instead of four per cent regular tax. The company is also eligible for capital subsidy.

UNI DP KR VV1614