Chiripal group to foray into denim

Nandan Exim Ltd, a group company, will tap the market with an initial public offer in May to partially finance the project.

The group is planning to set up a plant on the outskirts of Ahmedabad for manufacturing denims and bottom weights (cotton trouser material).

The public issue of 60 lakh equity shares of Rs 10 each for a cash premium of Rs 10, aggregating Rs 12 crore, will open on May 12 and close on May 20. After the public issue, promoters stake in Nandan Exim will be reduced to 56 per cent.

Nandan Exim reported a turnover of Rs 45 crore for the first nine months of the fiscal year ended December 31, 2004.

"We have already begun installing looms for both denim and the bottom weights. We will begin the production by June 15. As many as 96 looms (48 for each unit) have already been installed, while 60 others are in transit," Ved Prakash Chiripal, chairman, Chiripal group, said. Almost 60 per cent of the total bottom weights manufactured will be exported.

Of the total Rs 63 crore that the group will invest on the denims and bottom weights plant, located at Piplaj near Pirana on the outskirts of Ahmedabad, Rs 38.38 crore will be financed by a consortium of banks that include SBI, OBC and UCO Bank.

Around Rs 12 crore will be raised through the IPO, while the rest will be through internal accruals, said Jai Prakash Chiripal, director, Chiripal group of companies.

Ved Prakash said that the company will have an installed capacity of manufacturing 10 lakh metres of denim and 10 lakh metres of bottom weights a month.

"The commissioning of the denim unit will position the group as a manufacturer of both cotton as well as synthetic textiles, as two of the group companies are already manufacturing synthetic materials," he said.