Meghmani to raise Rs 120cr for expansion, diversification

New Delhi, May 31 (UNI) Meghmani Organics Ltd (MOL), pigment and agrochemical manufacturer, plans to expand its product portfolio and will raise Rs 120 crore from its initial public offer opening on June 4.

Gujarat-based MOL, primarily an exporter, will now increase its focus on the domestic pigment and agrochemicals market worth Rs 1,500 crore each of which it enjoys a 8-9 per cent share.

''We wish to expand our brand portfolio in both the pigmemt and agrochemicals business. We will set up more plants and introduce more products. With 90 products in place, 415 registrations are in the pipeline,'' MOL Chairman and Managing Director Jayanti Patel told reporters here today.

MOL will enter the capital market with an issue of about 5.5 lakh equity shares of Re 1 each at a price band of Rs 17-Rs 19.

The amount raised through the IPO will be partly utilised for MOL's greenfield expansion plan for the manufacture of yellow, red and blue colourants with a capacity of 500 tonnes per annum.

The company will use the proceeds to invest in subsidiary, Meghmani Energy Ltd for setting up a three MW captive power plant at Rs 14.41 crore to be located at Chharodi. ''We will also use the funds for our inorganic growth and diversification opportunities and working capital requirements,'' Mr Patel said.

The company, presently engaged in the manufacture of blue and green colourants with a capacity of 15,000 tonnes and 1,800 tonnes respectively, will double its production capacity post the IPO, which closes on June 7.

The issue is being made through 100 per cent book building wherein minimum 60 per cent will be to qualified institutional buyers. Of this, 5 per cent is reserved for mutual funds.

Of the total issue size, 5,36,842 shares will be for non-institutional investors and 16,10,526 shares for retail.

MOL reported a turnover of Rs 417 crore during 2006-07 and targets to clock Rs 600 crore as turnover in the current fiscal.

At present, it has four manufacturing facilities across India.

and will set up a new high performance pigment plant at Vatva, Ahmedabad at an investment of Rs 14.52 crore and a multi-purpose agrochemicals plant at Panoli with Rs 11.42 crore.

Orders for plants and machinery for all these plants are in various stages of placement and commercial production is likely to commence by year-end.

The company offers a range of products catering to a diversified customer base. Within pigments, it specialises in green and blue pigments, which have varied end use applications including printing inks, plastics, rubber, paints, textiles, leather and paper.

UNI