BAN Labs Ltd (BLL), the Rajkot-based ayurvedic major has planned to tap the market via an initial public offer (IPO) to raise Rs 27 crore. The issue is likely to hit the market in March. The company has filed an offer document with Sebi.

Lead managed by Aryaman Financial Services Ltd, BLL would make an offer of 91.21 lakh equity shares of Rs 10 each for cash at a premium of Rs 20 per share, aggregating to Rs 27.36 crore.

Speaking to The Financial Express, BAN Labs CEO Naresh Shah said, "We have been manufacturing the ethical ayurvedic medicines for nearly four decades. We want to further expand and strengthen our manufacturing capabilities."

The proceeds of the issue would be utilised to part-finance the expansion project for the manufacture of ayurvedic healthcare products, to set up a research & development unit and to set up marketing offices in major cities in India. The object of the issue is also to fulfill the long-term working capital requirements of the company, he added.

Out of the present issue, the company has reserved a major chunk of 38.5 lakh shares to financial institutions, FIIs and NRIs/OCBS. The company would also make a net offer of 52.5 lakh shares to the public. BLL is setting up a Rs 22 crore project at Rajkot, which involves enhancing existing infrastructure, installation of new plant and sourcing of technological know-how.

Besides the existing products, BLL has plans to manufacture healthcare products like ayurvedic/herbal products, allopathic pharma products, OTC/herbal body care/personal care products/herbal cosmetics and herbal veterinary products. The company's performance for the past three years has been good, which was marked by the increase in turnover and profits. For the nine-month period ended December 2000, the total income was Rs 9.5 crore.

The net profit for the same period was Rs 58 lakh. The shares are proposed to be listed at Mumbai and Rajkot.