Lokesh to raise Rs 40 cr through IPO

The issue opens on April 7.

Hyderabad-based Lokesh Machines Limited (LML), manufacturer of a range of machine tools, plans to raise Rs 40 crore through an initial public offering (IPO). It would be taking the book building route for the purpose.

The company's growth plans include setting up a facility for machining and supply of auto components for Ashok Leyland, upgradation of its existing facility for manufacture of computer numerically controlled (CNC) machine tools to cater to export markets, and to meet its working capital requirement. The issue opens on April 7 and closes on April 13. The price band is Rs 130-140.

Speaking to mediapersons, M Lokeswara Rao, managing director, LML, said, "We are putting up a new line for manufacture of engine components for Ashok Leyland's truck division. The operations would commence in October. We are also upgrading our existing CNC plant and are targeting more export orders."

Rao said that the CNC segment in the machine tool industry was growing at about 20 per cent and was expected to reach 30 per cent by the end of the next fiscal. LML sold about 300 CNC machines in 2005-06, of which about 60 were exported.

LML currently has one dedicated manufacturing plant for Mahindra & Mahindra, which manufactures the main engine block component for its Scorpio.

Lokesh earns 50 per cent of its revenue from CNC division, 35 per cent from its auto component division and the remaining from the special purpose machines (SPM) division.

Established in 1983, LML originally was into developing SPMs for frontline auto companies such as Ashok Leyland, Mahindra & Mahindra and Honda Motorcycles. It later ventured into CNC machine tools and manufacturing of auto engine components. The company earned a total income of Rs 69 crore in 2004-05.