Servalakshmi Paper Ltd, part of Coimbatore-based Servall group of companies, plans to raise around Rs 60 crore through an initial public offer (IPO) to fund its expansion.
R Ramswamy, chairman, Servall, said the company had set up an integrated paper mill at Vaduganpatti post, Tirunelveli district in Tamil Nadu, with an investment of around Rs 280 crore. The mill went on commercial production in April 2010.
The company acquired 350 acre of land, of which 40 acre was used for setting up the mill, while 150 acre to cultivate sugarcane.
The current capacity of the mill is 90,000 million tonne per annum (mtpa), which would be increased 1.08 lakh tonnes by the second half of 2011.
A part of the proceedings would be used for the expansion plan and rest would be for additional infrastructure and value-added products including cutsize copier, value-added computer stationery and others, said K P Reddy, chief executive officer, Servall. He added that currently mill capacity utilisation was 60 percent, which would be increased to 80 per cent next year.
The company expects 20 per cent of the business from export markets, which includes Middle East, Egypt, Nigeria and Sri Lanka.
“We will produce wide range of printing and writing papers and high-end newsprint under our own brand name of Lakshmi,” he said.
The company intends to produce coated, uncoated copier, cream wove, SS maplitho, computer stationery and text/note book papers. The company also focuses on high-end newsprint.
