Lalru textile firm to raise Rs 30 crore via IPO

Lalru-based Rana Polycot, a textile venture of the Rana group, has decided to hit the capital market through an IPO of about Rs 30 crore.

The company will raise money from the capital market to put up a dyeing unit. According to Chief Executive Officer Mohan Jit Singh Pooni, in the present scenario it is more lucrative for the company to export dyed yarn.

"One reason is that the quota regime has come to an end, giving more access to the global market. The other reason is that in many European countries, there are restrictions on yarn dyeing, and so supplies from Indian exporters are welcome", said Pooni.

In the first phase of expansion, the company will spend about Rs 70 crore on putting up a dying unit, and increasing the capacity of its garments and spinning divisions. The balance amount will be funded through debt and internal accruals.

The company is putting up a state-of-the-art dyeing unit with a capacity of 4.8 MT per day.

The unit will be operational by November 2006. Under current expansion plans, the company is also increasing the capacity of its garments division from 1500 pieces to 4000 pieces per day, which will be completed by July 2006.

Rana Polycot is also increasing the capacity of its spinning division from 35,000 spindles to 50,000 spindles by July 2006.

The four-year-old 100 per cent EoU (export-oriented unit) company exports combed cotton yarn to South Korea, China, Hong Kong, Singapore, Indonesia, Turkey and Europe.

The company is also contemplating putting up a weaving unit for suiting and shirting, with a capacity of 106 looms at Rs 100 crore in the second phase of expansion. In phase 2,the company will invest Rs 14 crore in a 20 Mw power plant that will be either be a husk-based or petra coke-based power plant.

The company will sell power to the Punjab Electricity Board, and also use it for self consumption. The company has plans to enter the retail market of fashion garments in India in a few years' time.