V Guard, the electrical and electronic appliances company, has filed the DRHP with SEBI on 23rd November, 2007 for an IPO of 76,00,000 equity shares of Rs 10 each at a premium to be declared through a 100 per cent book building process
The issue will constitute 25.46 per cent of fully diluted post issue paid-up capital. Most of the enhanced equity was subscribed to by the promoters and four per cent was extended to the employees of the company. Along with the IPO, the company also planned an ESOP, which is expected to take the employees' shareholding to eight per cent. The promoters are also expected to dilute a small portion of their stake to business associates at a market related price at the time of the public issue.
The Kerala-based company, engaged in the manufacturing and marketing of electrical and electronic products, proposes to use the proceeds for setting up facilities for cable manufacturing in Coimbatore and Uttaranchal; enameling plant at Coimbatore; development and pilot production plants for water heaters, fans and pumps at Himachal Pradesh and Coimbatore; service and distribution centres at Bangalore, Hubli and Vijaywada.
The BRLM to the issue is Anand Rathi Securities. The stock is proposed to be listed on the BSE and NSE.
The company will use a part of the proceeds from the equity offer for opening new factory in Himachal Pradesh and Uttarakhand. The remaining would be invested in creating a new cable factory, extending the distribution and service network mainly in North India and for creating improved R&D facilities.
With the opening of the production facility in Himachal Pradesh, the company plans to transform its market share from 80:20 to 60:40 in the North - South regions.
The company has recorded a 31% growth in sales turnover to Rs 241 crore (Rs 184 crore). Its net profit grew by 45% to Rs 13.32 crore last year, while gross profit recorded a 44% growth to Rs 20.49 crore. There was a fall in the EPS from Rs 30.68 to Rs 13.96 as on March 2007.