Chiripal Industries (CIL), engaged in the manufacture of yarn and readymade garments, has filed its DRHP with SEBI on 24th March 08 to enter the capital market with an IPO of 14,216,700 equity shares of Rs 10 each at a price to be decided through a 100% book building process at a later stage.
The issue comprises of a net issue to the public of 1,21,00,000 crore equity shares, promoters' contribution of 1,916,700 shares and a reservation of up to 2,00,000 shares to the employees of the company. The net issue will constitute 34.57% of the post issue paid up capital of the company.
The shares will be listed on BSE & NSE. The company has appointed IDBI Capital Market as the book running lead manager to the issue.
The object of the issue is to finance the expansion cum modernization of existing manufacturing facilities; for acquiring equity stake in Vraj Integrated Textile Park (VITP) and investment in subsidiary - Chiripal Lifestyle (CLI)
The company intends to use the proceeds from the issue to part finance the abovementioned project cost of Rs 231.33 crore. It will use Rs 53.33 crore for expansion cum modernisation of existing manufacturing facilities; Rs 2.15 crore for acquiring equity stake in VITP and Rs 6 crore for investment in CLI.
The company would also be availing term loans to the extent of Rs. 167 crore to part finance the expansion programme.
CIL, the flagship company of Ahmedabad based Chiripal Group, has its presence in the entire value chain from manufacturing of yarn to readymade garments. CIL operates in man-made fiber segment, specially in the polyester-based products.
The manufacturing facilities of CIL consisting of two units are located at Piplej in Ahmedabad. Manufacturing of partially oriented yarn (POY), fully drawn yarn (FDY), draw twisted yarn, air texturised yarn, draw texturised yarn, warp knitted fabrics and circular knitted fabrics is undertaken at unit 1, while manufacturing as well as processing of varieties of fabrics and ready-made garments is undertaken at unit 2. The company has a processing house with a capacity of 85.80 million meters per annum.
The proposed expansion programme includes expansion of its POY, FDY, texturised yarn and warp knitting facilities, embroidery, processing and readymade garments facilities. The company would also be setting up a new yarn dyeing facility, besides fabric dyeing and weaving facilities. A new 7.50 MW lignite- based power plant would also be installed to cut down on power cost.
Chiripal Industries would be investing in CLI for the purpose of opening of exclusive brand outlets by the name of ConneXions. CLI would be opening around 110 outlets in three phases. About 20 outlets would be opened in first phase. Chiripal Industries would also be acquiring 43% stake in VITP, an SPV formed by a group of entrepreneurs led by Chiripal group for setting up an integrated textile park near Ahmedabad.
For the year end March 31, 2007, the company posted an income of Rs 399.83 crore and a net profit of Rs 20.35 crore as compared with an income of Rs 356.69 crore and net profit of Rs 21.29 crore for FY06. For the 6 months ended September 30, 2007, the company posted an income of of Rs 249.90 crore and net profit of Rs 14.44 crore as against an income of Rs 197.08 crore and net profit of Rs 11.29 crore for the corresponding 6 months of 2006.