Somi Conveyor Beltings IPO to open June 25

Tag : rubber conveyer
MUMBAI: Somi Conveyor Beltings Ltd will enter the capital marketson June 24 with an issue of 62,27,860 equity shares of Rs 10 eachat a fixed price of Rs 35 aggregating to Rs 21.8 crore.

The issue comprises a contribution by promoters of 14,99,286 sharesaggregating to Rs 5.25 crore. This leaves a net issue to the publicof 47,28,574 shares aggregating to Rs 16.55 crore, including anallocation of 10 per cent to qualified institutional buyers.

The net issue to the public would constitute 40 per cent of thefully diluted post issue paid up capital. The issue closes on June27.

Somi Conveyor Beltings is a manufacturer of rubber conveyor beltsof various sizes used for industrial applications of materialhandling in various industries such as coal, lignite, iron ore,mining, cement, power, steel, fertilizer and sugar. The companyalso recently introduced food grade belts for tea gardens and saltindustries.

The company proposes to utilise the net proceeds of the issue topart finance its Rs 35.09 crore project cost. The expansion andmodernisation project consists of setting up of new manufacturingunit, purchase of land and building for office use, meeting marginmoney requirement for enhanced working capital and meet theinterest cost during the construction period.

The project would be funded through promoter contribution of Rs10.04 crore, IPO proceeds of Rs 16.55 crore and term loan fromPunjab National Bank of Rs 8.50 crore.

The company had commenced production with an initial capacity of36,000 MPA and it has expanded to present operating capacity of1,67,660 MPA. Depending upon the width of the rubber conveyor beltthe capacity utilisation can be stretched up to 2,00,000 MPA.

Considering the potential for growth, it intends to raiseproduction capacity to 4,00,000 MPA and also enlarge the belt widthfrom the current 1200mm to 2000mm.

Somi Conveyor is setting up new factory unit with an installedcapacity of 1,72,080 MPA for manufacturing rubber conveyer belts of2000 mm width at Tanawara, Jodhpur, Rajasthan. The capacity can bestretched up to 2,00,000 MPA.

The company