Chiripal Industries to raise Rs 115 crore through IPO

With expansion on the anvil in its manufacturing and processing units, Ahmedabad-based Chiripal Industries Ltd, is planning to enter the capital market with an initial public offering to raise around Rs 100-115 crore by May 2008.

The flagship company of textile conglomerate Chiripal group is expanding its 43,700 tonnes per annum capacity by 20 per cent, said Vishal Chiripal, director of Chiripal Industries Ltd.

"We are expanding the manufacturing and processing of partially oriented yarn (POY), polyester texturised yarn (PTY) and fully drawn yarn (FDY) under our units like Shanti Processors Ltd and Chiripal Petrochemicals Ltd," said Chiripal.

Post IPO, the group intends to take its turnover from Rs 1,200 crore to Rs 2,000 crore in the next three years. The group is already expanding its denim and spinning operations under Nandan Exim Ltd at an investment of Rs 328 crore.

"Currently, we have 30 million metres per annum capacity of denim yarn manufacturing and are adding another 10 million metres. Besides, we are expanding our spinning capacity from 30 tonnes per day (tdp) to 50 tpd, apart from setting up a 15-Mw captive power plant. These expansion activities are likely to be completed by the end of 2008," said Chiripal, adding that out of the Rs 328 crore earmarked for the expansion, Rs 30 crore will be invested in expansion of denim manufacturing.

The company is also planning to enter the home textile retail in domestic market in the near future. At present, it exports home textiles to Germany, apart from selling in the domestic market through Vishal Fabrics Ltd.

Recently, Chiripal Industries Ltd launched its own lifestyle apparel brand 'ConneXions' through its newly formed subsidiary Chiripal Lifestyle Ltd. Initially, the company will set up 30 exclusive branded outlets of 'ConneXions', during 2008-09, of which 11 will be opened in Gujarat.

A premium men's and women's garment and accessories brand, 'ConneXions' is targeted at consumers in the age group of 17-35 and priced in the range of Rs 199 to Rs 1,399.

Chiripal Lifestyle Ltd, which has invested between Rs 10 crore and Rs 15 crore in the retail venture, expects to do an initial turnover of Rs 50 crore in the first year of operations.

"In next three years, we will invest more in the retail venture to generate a revenue of Rs 150 crore. However, the share of garments in the group's overall operations will be around 25 per cent," he added.