Alok Industries plans Rs 70 cr pref placement

Alok Industries is set to raise nearly Rs 70 crore through preferential allotment of shares.

The proposed allotment is priced at Rs 61 a share, marginally higher than today's closing price of the stock at Rs 59.45 on the Bombay Stock Exchange.

The company will allot 57,37,700 preferential shares, representing a 4.6 per cent of the enhanced capital to the ILFS group. The promoters will also subscribe to 55,73,700 shares which will increase their stake by two per cent from the current 27.97 per cent.

The proposed preferential allotment is aimed at part financing the Rs 580 crore expansion plan of the company. It plans to fund nearly Rs 70 of the expansion plan by equity, Rs 69 crore from internal accruals, and the rest through debt.

Sources in the company said the expansion plan is aimed at enhancing home textiles production capacity from the current 6.2 million sheets a day to 10 million sheets a day.

Fabric production will be double from the present 100,000 meters a day while garments production will increase from one million pieces to eight million pieces.

The company plans to complete the expansion programme for the home textiles division by April, 2005. The programme for the fabric division and the garments division is expected to be implemented by October and December, 2005, respectively.

Alok Industries also plans to place 6,80,00,000 optionally convertible preference shares (OCPS), having a face value of Rs 10 each to TAD (Mauritius) Ltd.

The resolutions pertaining to the placement of the preferential shares and OCPS will be placed before the shareholders at an extra-ordinary general meeting on November 29.

Analysts following the textiles industry are bullish on Alok Industry. They said the company's order book position was healthy and it would get further booster with the abolition of quota in January, 2005.

Analysts predict that exports from five countries, namely China, Bangladesh, Vietnam, Pakistan, and India will increase substantially from next year.

Capex plan

Proposed allotment priced at Rs 61 a share marginally higher than Tuesday's closing price of Rs 59.45 on BSE

The company to allot 57,37,700 preferential shares, representing 4.6% of enhanced capital to ILFS lThe allotment aimed at part financing the firm's Rs 580 cr expansion plan