Shirdi Industries Ltd (SIL), the manufacturer of Asis brand furnishing solutions, plans to enter the capital market next month to raise Rs 110 crore. The company is currently awaiting approval from the capital market regulator the Securities and Exchange Board of India (SEBI).
The proceeds of the issue is proposed to be spent on company’s greenfield and brownfield expansion plans which will entail an investment similar to the raising plan from capital market.
SIL plans to set up a greenfield medium-density fibre (MDF), thin MDF and laminated particle board manufacturing facility at Gummidipoondi near Chennai at an investment of Rs 102 crore. The unit in Chennai will have capacity to make 300 cubic meters (CBM) of MDF boards, 100 CBM of thin MDF and 12x6 feet laminated particle board.
The plant will house a decorative laminate line, printing line, pre-lamination lines. SIL has acquired 13 acres and in talks to buy another 20 acres to set up the plant full-fledged, said Rakesh K Agarwal, Managing Director of Shirdi Industries.
The company currently has two manufacturing units. At Pantnagar in Uttarakhand it has a production facility of particle board with an installed capacity of 230 cubic metres (CBM) per day which is currently operationalised at 56 per cent. To achieve 100 per cent capacity utilisation, the company requires Rs 10 crore of additional investment to install balancing equipment.
Another plant of decorative laminates at Coimbatore in Tamil Nadu has a capacity of 3.6 million sheet. Currently, this plant has no proposal on care for expansion.
SIL has recently set up a 20,000 sqft at Bhiwandi showroom to display furniture made at its factory.
It also proposes to set up a manufacturing facility at Bhiwandi, near Mumbai to manufacture edge solutions for wood based furniture products. Being furniture a voluminous product transportation for a long distance does not make economic values. Therefore, it is advisable to set up manufacturing unit near the consumption centres, he said.
Despite being dominated by unorganised sector players, the Rs 60,000 crore domestic furniture industry is growing at a minimum 20 per cent with a limited branded players in existence.