IPO Alert: Archidply Ind to invest 620 mln rupees in new plants

[K.Karthik Raja]

IPO Alert: Archidply Ind to invest 620 mln rupees in new plants
Monday, Jun 9

MUMBAI - Archidply Industries Ltd, Bangalore-based plywood and
decorative
laminate manufacturer, plans to invest nearly 620 mln rupees to set up
one
plant each in Karnataka and Uttarakhand.
"Construction has started and these plants will be fully
operational by
Aug 2009," Joint Managing Director and Chief Financial Officer Shyam
Daga
said on the sidelines of a conference to detail the company's initial
public
offer.
The price band for the 6.6-mln-share IPO has been fixed at 70-80
rupees a
share of face value 10 rupees. The IPO will open Wednesday and close
Jun 17.
Archidply is setting up a facility for manufacturing plain
particle board,
pre-laminated board, and decorative plywood at Chintamani in
Karnataka, and
another one for medium density fibreboard at Rudrapur in Uttarakhand.
"We are confident of the IPO getting fully subscribed as domestic
institutional investors, mid-cap funds, and high networth individuals
have
envisaged interest in the issue," Ashutosh Maheshvari, chief executive
officer, Motila Oswal Investment Advisors Pvt Ltd, said.
Motilal Oswal Investment Advisors Pvt Ltd is the sole book-running
lead
manager to the issue.
The company's production capacity will more than double to 45 mln
square
metres after the new capacities come up, Daga said.
However, the company is not utilising its full capacity at
present, and
production is around 10 mln square metres against capacity of 22 mln
square
metres.
The company has recently started exporting decorative laminates to
the
U.S., and expects to grow in new markets like the Middle East,
Singapore, and
Hong Kong, said Executive Director Rajiv Daga.
Archidply is also entitled to over 24,000 units of carbon credits
from
its existing unit in Uttarakhand. The earnings from these is seen 20
mln
rupees annually at the current rate.
Globally, carbon credits are being sold at 13-16 euros per 1 tn.
"From the two new plants we hope to earn another 20 mln rupees,"
Rajiv
Daga said. End