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Calcutta, March 30: Ramkrishna Forgings Ltd (RFL) will enter the capital market on April 2 with an initial public offering of Rs 12.25 crore. The issue will close on April 10.
The company will offer 61.25 lakh equity shares of Rs 10 each for cash at a premium of Rs 10 per share.
RFL managing director Naresh Jalan said today that a retail investor could apply for a minimum of 100 shares. Retail investment is limited up to Rs 50,000.
The proceeds from the public offer will be utilised to part finance its expansion plans at the Jamshedpur plant and install a new numerically-controlled machining unit there for ready-to-use auto component.
HDFC Bank is the banker to the issue, while Microsec India and Karvy Investors Services are lead managers.
This is the second expansion project of the Calcutta-based company, which is expected to cost around Rs 26.29 crore. The programme is appraised by Canara Bank, which has already extended a term loan of Rs 9.25 crore towards the project.
The promoters have invested Rs 4.7 crore in the expansion programme, while Rs 9.26 lakh came from internal sources.
The proposed expansion will raise RFL’s total installed capacity from 12,050 metric tonnes (MT) to 18,000 MT per annum by the end of the next fiscal.
It had raised the capacity from 5,550 MT to 12,050 MT in February, 2003.
RFL expects to close the current fiscal with a sales turnover of Rs 35 crore. The company is targeting Rs 100 crore sales for 2004-05.
“With enhanced capacity, we would target the global auto component market more aggressively,” Jalan said.
Ramkrishna Forgings’ clientele include Tata Motors, Hindustan Motors, Tafe, Tisco, Bharat Earth Movers and Indian Railways.
It also supplies to tier-I component suppliers of some of the leading automobile brands across the globe.
As a move towards the forward integration process by supplying ready-to-use auto components, the company plans to set up its own machining facilities. It is also planning to manufacture finished rear axle shafts required in bulk by auto companies.
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