Prakash Steelage IPO subscribed 4.53 times, Price fixed at Rs 110

Mumbai: Prakash Steelage Limited ('PSL'), an ISO 9001: 2008 and PED certified Company engaged in the manufacturing of seamless & welded stainless steel Pipes, Tubes and U-tubes as well as a "Govt. Recognized Star Export House", has fixed the Issue Price at Rs. 110 per per Equity Share (upper end of the Price Band fixed between Rs. 100 and Rs. 110 per Equity Share) for its public offer of 62,50,000 Equity Shares of Rs. 10 (the "Equity Share") for cash at a price determined by 100% book building process aggregating to Rs. 68.75 crore.

The Issue, which closed on August 9, 2010, for QIB Bidders and on August 10, 2010, for non-QIB Bidders, was subscribed to 4.53 times based on the preliminary bidding data received from the stock exchanged on the closing day.

The Retail bidder portion was subscribed approximately 6.62 times, the Non Institutional bidder portion was subscribed approximately 10.91 times, the Qualified Institutional Bidders ("QIBs") portion was subscribed approximately 1.27 times and the Employees bidder portion was subscribed approximately 1.02 times. The Company proposes to list its Equity Shares on the Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE").

The Issue comprises a fresh issue of 62,50,000 Equity Shares and a reservation upto 100,000 Equity Shares for eligible employees (the "Employee Reservation Portion"). The Issue constitutes 35.71% of the post Issue paid-up capital and the Net Issue (the Issue less the Employee Reservation portion) constitutes 35.14% of the fully diluted post Issue paid-up capital of the company.

The objects of the Issue are, amongst others, to raise resources to part finance its expansion plan at the Company's existing manufacturing facility at Umbergaon, Gujarat and also to meet the additional working capital requirement.

Incorporated in May 1991 in Maharashtra, Prakash Steelage Limited, promoted by first generation entrepreneurs Mr. Prakash C. Kanugo and Mr. Ashok M. Seth, has a legacy of over 19 years of presence in the industry. The Company carries out its production through its two state-of-the-art production units situated at Silvasa and Umbergaon (Gujarat). The Company increased its manufacturing capacity to 12,200 MTPA in the year 2007 by setting up a new state-of-the-art plant at Umbergaon. Going ahead, it added another 3,400 MTPA taking the total to 15,600 MTPA out of the proposed expansion plan. The Company has been exporting its products to several MNCs in more than 40 countries across the globe.

Prakash Steelage limited has a strong customer base that includes a diverse set of industries including Oil & Gas, Power, Pharmaceutical, Petrochemical, Sugar, Dairy, Automobile and its products have found wide acceptance in the markets of North America, South East Asia, Africa, Middle-East and Europe. It is now planning to boost export in South East Asia and other Western countries by participating in trade fairs and exhibitions all over the World. The Company ensures that the customers get best possible product with competitive prices through exhaustive R & D and rigorous inspection. The Company has a relationship with established players such as Bharat Heavy Electrical Ltd., BGR Energy Systems and Praj Industries Ltd. amongst others. It has new products in the pipeline and plans to foray into Duplex, Super Duplex and Super Austenitic pipes / tubes.

The Company clocked a turnover of Rs 437.10 crore for the year ended March 31, 2010, with EBIDTA of Rs 45.14 crore and profit after tax of Rs 17.82 crore. The earning per share works out to Rs 15.84 as per the audited restated accounts.

The Book Running Lead Manager ("BRLM") to the Issue is Keynote Corporate Services Limited.

The Syndicate members to the IPO are Keynote Capitals Limited, ENAM Securities Pvt. Ltd. and SMC Global Securities Limited.

Source : Equity Bulls

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