M and B Switchgears Limited, engaged in manufacturing of power transformers, distribution transformers ,furnace transformers and special purpose transformers, proposes to enter the capital markets on 28th September 2011 with a public issue of 50,00,000 Equity shares of Rs 10 each through 100% book building process. The Price Band has been fixed at Rs 180 to Rs 186 per equity share and the Issue closes on 5th October 2011. The Issue will constitute 25% of the post-issue paid-up equity share capital of the Company. The Equity shares are proposed to be listed on the BSE and NSE. D&A Financial Services Private Ltd is the sole Book Running Lead Manager of the Issue. ICRA Ltd has assigned IPO Grade 2/5’ to the Issue indicating 'below average fundamentals’.
The Company proposes to use the net proceeds of the Issue to part finance its project of setting up a new grid connected 4 MWp solar photovoltaic power plant at Gagorni in Rajgarh district of Madhya Pradesh. The Indore-based Company proposes to assign the execution job for the project, excluding the land development, civil work and evacuation infrastructure to Tata BP Solar India Ltd. The project is expected to generate 6.656 million units of power at 19% plant load factor (PLF).
M and B Switchgears Ltd is in the business of manufacturing transformers for more than 30 years and are a preferred and regular supplier of quality transformers. Now the Company proposes to diversify into solar power projects as there is a big demand- supply gap in renewable energy.
India has an estimated renewable energy potential of 222,000 MW. Of this, grid connected potential is 132,000 MW. As of March 2010, the actual installed capacity was 17,222 MW of which grid connected capacity was 16,817 MW. “Central and State governments have provided several incentives for promotion of renewable energy such as preferential purchase rates, obligations for distribution companies to purchase renewable power up to 10% of the energy sourced, capital subsidies, import duty exemptions and accelerated depreciation,” says Shyam Sunder Mundra, Chairman and Managing Director of the Company.
As of March 2010, grid-connected renewable power represents 10% of the installed power capacity in the country and just about 4% of the total power generated. “ Also, India’s solar footprint is extremely small. However, the assessed potential indicates that when fully harnessed, solar power is expected to emerge as the renewable energy source with largest share in the renewable pie,’’ Mundra added.
In order to achieve this, M and B Switchgears Limited is in the process of setting up 2 MWp of Grid connected P V Solar Power Project in Rajgarh district of Madhya Pradesh. The project is being funded through internal accruals and a term loan from the banks. Way forward, through the proceeds of the IPO, the Company proposes to strengthen its presence by installing additional 4 MWp of grid connected PV solar power project.