Notwithstanding the crash in stock markets, Vision Organics Ltd is charging a premium of Rs 30 for its Rs 14.5-crore initial public offer (IPO). The primary market is currently dominated by software and media issues and IPOs from manufacturing companies have dried up. However, Vision Organics, which manufactures PVC plasticizers, is an exception. The company is offering 36.25 lakh shares and the IPO is lead managed by Fedex Securities. The issue is opening for public subscription on October 19 and is closing on October 21. The shares are proposed to be listed at the stock exchanges of Vadodara, Mumbai and the National Stock Exchange. The company is demanding only Rs 10 on application and Rs 30 on allotment.Vision is offering shares at a price-earning multiple of 3.15 (based on 2000-earnings) which is low compared with the industry average PE of 16. As on March 31, 2000, return on networth was 42 per cent.
Vision Organics, one of the largest manufactures of PVC plasticizers in India, has chalked out an expansion project with a total cost of Rs 33.41 crore. Of the total project cost, a major portion of Rs 19.08 crore is going towards working capital requirements.
Besides the public issue proceeds and promoters' contribution of Rs 72 lakh, the project is being financed through a term loan of Rs 6.8 crore from bank, Rs 6.61 crore from internal accruals and Rs 2.6 crore as unsecured loans and deposits.
The company caters to manufactures of PVC rexines, PVC cables, PVC pipes, PVC films and PVC shoes. The company recorded a turnover of Rs 78.53 crore for fiscal 2000 against Rs 61.46 crore in previous fiscal. Net profit was Rs 6.42 crore for fiscal 2000 against Rs 3.62 crore in fiscal 1999.
The company is projecting a net profit of Rs 10.92 crore on turnover of Rs 145 crore for fiscal 2001.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.