Somi Conveyor's fixed price IPO subscribed 1.9 times

Chennai, Jun 30 (UNI) The fixed price IPO of Somi Conveyor Beltings Ltd has been subscribed 1.92 times even as the stock markets are witnessing heavy selling pressure.

The company had entered the capital market on June 24, 2008, with an issue of 62,27,860 equity shares of Rs 10 each at a fixed price of Rs 35 (including a premium of Rs 25 per equity share), aggregating to Rs 2179.75 lakh, according to a company release here today.

The net issue to the public would constitute 40 per cent of the fully diluted post issue paid up capital of the company.

The company proposed to utilise the net proceeds of the issue to finance its Rs 3,509 lakh project cost. The expansion and modernisation project consisted of setting up of new manufacturing unit, purchase of land and building for office use, meeting margin money requirement for enhanced working capital and meeting the interest cost during the construction period.

The company, which was earning profits since last five years, had commenced production with an initial capacity of 36,000 MPA and it had expanded to present operating capacity of 1,67,660 MPA.

Depending upon the width of the rubber conveyor belt, the capacity utilisation could be stretched up to 2,00,000 MPA. Considering the potential for growth, it intended to raise production capacity to 4,00,000 MPA and also enlarge the belt width from the current 1,200 mm to 2,000 mm, the release added.

UNI SNR SJ 1744