MIC to mop up Rs 100 cr via IPO

Hyderabad-based manufacturer of LED display systems MIC Electronics plans to tap the capital markets with an initial public offering (IPO) early next year. According to industry sources, the company intends to raise Rs 100 crore from the IPO to be used for expansion plans.

When contacted, MIC Electronics managing director and CEO M V Ramana Rao confirmed that the IPO would hit the market in the first quarter of 2007.

He, however, was non-committal on the amount to be raised through the IPO.

"We are planning to invest about Rs 14-15 crore in infrastructure development and Rs 14 crore for rentals of screens. About Rs 4-5 crore would be used for development of 3D LED display screens and Rs 5 crore for enhancing the research and development," Rao said.

A part of the proceeds would also be used for acquiring a US-based company, Infostep, and is also foraying into entertainment theme park developments. The parks would be developed in Visakhapattanam and would be operational in 3-4 months.

The proceeds would be also used for upgrading manufacturing capacities, acquisition of US-based company Infostep and setting up digital theatres.

The company, which had earlier filed a draft red herring prospectus (DRHP), intends to list its shared both on BSE and NSE. It had appointed Edelwesis Capital as advisors to the issue.

MIC Electronics will issue 51,00,000 equity shares of Rs 10 for cash at a price to be decided through the 100 per cent book-building process.

The public offer constitutes 25.34 per cent of the company's fully diluted post issue paid up equity capital. At present, Ramana Rao's family and associates hold the entire stake in the company.

MIC Electronics is into media (LED display), infotech (software) and telecommunications business. In financial year ended March 31, 2006, it had posted a net profit of Rs 15.47 crore, while sales turnover stood at Rs 104.41 crore.