IFB may raise funds via preferential issue

Promoters likely to infuse Rs 2 crore

Buoyed by the growth in the automobile sector, IFB Industries, the Kolkata-based beleaguered home appliances and auto components outfit, is planning to raise working capital through a preferential issue.

Its promoter group Bijon Nag and other associates are likely to infuse around Rs 2 crore through the allotment.

IFB Industries, which is now under the Board for Industrial and Financial Reconstruction (BIFR), has a strong regional presence in the home appliances segment like washing machine, microwaves, dish washers under the IFB Bosch brand.

Still regarded as a premium brand in the washing machine segment in the east, IFB fell sick three years back. Besides accumulated losses, it has made an operating loss of Rs 3.6 crore in 2003-04.

The executive director of IFB Industries, Dipak Mitra informed that the company is raising working capital as it has secured bulk orders in the automobile components segment.

"We badly need capital to service the orders. The automobile industry is booming. IFB is also getting good orders. The company is trying to reap the benefit of automobile growth in order to come out from BIFR. Besides, our home appliances segment is also doing well with the introduction of grater variation in the ranges," he said.

He refused to disclose the amount the promoters would likely to pump in as working capital.

According to Mitra, it would issue 11.30 lakh shares to the promoters for raising working capital. "We have not yet decided about the price," he said. But sources close to the company said it could be around Rs 2 crore.

The promoter group now holds around a 38.53 per cent stake in the company. Indian promoters hold 33 per cent and the rest is held by the foreign collaborator H Schmid. The proposed private placement will be entirely to the Indian promoter group. The IFB scrip is now hovering around Rs 13-14.

Incidentally, IFB manufactures automobile body and transmission items. The product range also parking brake assemblies, clutch pedal, brake pedal and accelerator pedal and seat belt for various automobile manufacturers.