Mumbai, Nov 4: Greater participation of retail investors in its maiden public offering is one of the major objectives for Shree Rama Multi-Tech. Of the 1.36 crore shares of face value Rs 5 being offered to the public, 80.55 lakh shares, or 59 per cent of the total offer is through the fixed price portion. The balance 55.92 lakh shares, or 41 per cent, is through the book-building route. In addition to using the NSE terminals for the book-building process, the company is also talking to the BSE for using its BOLT network for the same.According to Rajnish Rangari, assistant vice president (investment banking), Khandwala Securities, ``We want greater retail participation in the Shree Rama Multi-Tech IPO.'' With the book-building part kept at 41 per cent, it is the responsibility of the knowledgeable investors to discover the price. After the book-building part closes, the fixed price portion would be open on subscription basis.
The Shree Rama IPO would be the third public issue to take the book building route after the process, in India, was first initiated by the recently concluded Hughes Software issue. The Delhi-based HCL Technologies' mega issue is going to be the second issue to take the book-building route.
Apart from offering a major portion through the book-building route, the company is also contemplating using the countrywide V-Sat networks of the two leading exchnages, the BSE and the NSE for the price discovery process. While the modalities to use the NSE terminals is already in place, according to BSE sources, talks are on between the company and the BSE for using the latter's BOLT terminals for the book-building purpose.
The main objective of the curent issue is to part finance the profect for expanding the plastic laminated tube manufacturing capacity by 324 million numbers to 640 million numbers. The project also envisages expanding themanufacturing capacity of other related products including paper cups, bags etc.
For fiscal 1999 ended September, Shree Rama earned a net profit of Rs 34.51 crore from a total income of Rs 150 crore. For the period under consideration, on an equity base of Rs 22.47 crore, earnings per share (of Rs 5 face value) works out to 7.34. During the period 1997-1999, the company's sales and net profit has shown a compounded annual growth rate of 48.3 per cent and 46.3 per cent.
BOOK MARKSNo of shares on offer: 1,36,47,750Book building portion: 55,92,000 sharesFixed price portion: 80,55,750 sharesFace value: Rs 5Issue size/price: to be decided through book buildingListing at: Ahmedabad, Mumbai, NSELead manager: DSP Merrill Lynch, Khandwala Securities
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.