Tirupati Inks Limited is tapping the capital markets with an FPO which has opened on Tuesday the 14th of September and closes today the 16th September 2010 for QIB’s and on Friday the
17th September for Non-QIB’s. The company is raising Rs 51.50 crs in a price band of Rs 41-43.
The company is currently quoted on the Delhi Stock Exchange and is into the manufacture of printing ink and trading in polyester films. The company has two plants located in Kanpur with an installed capacity of 1000 mt per annum on single shift basis and the Jammu unit which has a capacity of 840 mt per annum on single shift basis. The present utilised capacity for the year 2009-10 was 53.9%.
Objects of the issue
| 1. | Setting up facility for manufacturing of speciality inks and ink concentrates | Rs 24.25 crs |
| 2. | Capital Expenditure on lab equipments for existing facilities | Rs 0.25 crs |
| 3. | Proposed acquisitions | Rs 5.00 crs |
| 4. | Augmenting working capital resources | Rs 14.00 crs |
| 5. | General corporate purposes | Rs 5.00 crs |
| 6. | Meeting the expenses of the issue | Rs 3.00 crs |
| TOTAL | Rs 51.50 crs |
The company reported sales of Rs 71.67 crs for the year ended March 2010 which comprised of manufactured and traded sales.
| 2008-2009 | 2009-2010 (Rs in lacs) | |
| Manufactured Sales | 1346.58 | 1795.03 |
| Traded Products | 3684.69 | 5371.78 |
| Total | 5031.27 | 7166.84 |
| Profit after Tax | 80.00 | 215.42 |
| Pre –IPO equity | 31,75,626 |
IPO fresh issue including promoter’s contribution
At Rs 41 1,25,60,975 shares and at Rs 43 1,19,76,744 shares.
Market capitalisation post issue at Rs 41 Rs 64.52 crs and at Rs 43 Rs 65.15 crs
There is nothing in the company or its business to justify investment in this company fundamentally. However the present euphoric mood in the marketplace and the spate of issues in the primary market may see speculative activity in this share. I am not sure how this share would pan out post listing, but the end result a month after listing is more or less a certainty.
Conclusion
Do not apply if you look at fundamentals irrespective of what you hear on the grey market.
Sebi disclaimer: – I do not intend to subscribe to the issue
