By IANS,
Kolkata : Bangalore-based Archidply Industries Ltd (AIL), the flagship company of the Archidply group, has chalked out a Rs.830-million ($19.7 million) expansion plan for this fiscal.
“We have chalked out a Rs.830-million expansion plan. We will meet the expenses by taking Rs.330 million as bank loan and the remaining Rs.500 million will be raised through an initial public offering (IPO),” AIL joint managing director Shyam Daga told reporters here Thursday.
The company has kick-started the IPO Wednesday, and it will be closed June 17. It is floating more than 6.6 million equity shares of Rs.10 each for cash at a price band of Rs.70 to Rs.80. Motilal Oswal Investment Advisors Pvt Ltd is the book-running lead manager to the issue.
“Archidply has taken a loan of Rs.100 million from Oriental Bank, and another amount of Rs.230 million from Union Bank of India to fund the expansion,” Daga said.
The proceeds from the IPO would be used to set up a greenfield manufacturing unit at Chintamani in Karnataka at a cost of Rs.360 million and a new manufacturing capacity for medium density fibreboard (MDF) at Rudrapur in Uttarakhand for Rs.260 million. The rest of the capital would be used for pre-operative expenses and provision for contingencies and margin money for working capital requirement.
The company plans to reap full benefit of the expansion plans from August 2009.
Daga added: “We occupy eight percent of the total organised market share of the industry and we plan to double it in the next three years.”
Apart from the metropolitan cities, the company is also targeting tier II and tier III cities in India, like Mysore, Coimbatore, Madurai, Surat, Gangtok, Siliguri and Guwahati.
A project to set up Archidply franchisee stores is under consideration for the next fiscal, Daga added.