Slew of Gujarat firms set to hit IPO mart

With the sentiment bullish and Sensex rising, small- and medium-sized companies in Gujarat, along with the state government enterprises, are now looking for tapping the market.

As many as six companies in the state have already shown interest in going public through initial public offerings (IPOs), while another half-a-dozen companies are planning to go for rights issue.

The companies which may go for rights issues include state-run enterprises such as the Vadodara-based Gujarat Alkalies and Chemicals Ltd (GACL) and the Gujarat Industries Power Corporation Ltd (GIPCL). By the end of this month, the market expects the list to grow longer with more companies opting to tap the market.

The Rs 120 crore Dishman Pharmaceuticals & Chemicals Ltd, an Ahmedabad-based company which is mainly into bulk drugs and intermediaries, is planning to come out with an IPO in the next month at a premium of Rs 140 or more.

"The company has decided to offer 3.6 million shares to the public through a book-building issue and the floor price may be Rs 150 per share. Dishman plans to raise Rs 54 crore which will be used mainly for capacity expansion of our bulk drug and intermediaries business. But we do not have any plan to go for formulations or invest the raised capital to use for this purpose," said Deepak Pandya, company secretary of Dishman.

For the Dishman IPO, Enam Financial Consultants and IL&FS are the lead merchant bankers. The company's net profit stood at Rs 15.5 crore in the last fiscal year.

The government-owned GACL has decided to raise Rs 34.43 crore by issuing rights to the shareholders in the ratio of 3:5 at a price of Rs 12.50 per share whereas the prevailing market price is about Rs 60 per share.

GACL has already received Rs 10.39 crore from the government of Gujarat towards the advance against the rights shares.

Eight other government corporations, being the promoters of the company, also have agreed in principle to subscribe to the rights issue.

GACL, which posted a profit before tax (PBT) of Rs 53.28 crore at the end of the last fiscal year, reported a negative growth in PBT during 2001-02 with a net loss of Rs 40.78 crore and at the end of this September, GACL has posted a PBT of Rs 40.61 crore showing a complete turnaround.

By the end of the last quarter of the current fiscal year, the chemicals major has posted a PBT of Rs 28.35 crore.

GIPCL, the power generation company which is planning to go for an expansion with an investment of Rs 1,000 crore by setting up two new plants of 125 MW each in Surat district, may also go the GACL way.

GIPCL, which reported a sales turnover of Rs 995 crore by the end of the last fiscal year, reported a turnover of Rs 446.41 crore by the end of the first half of the current fiscal year.

Net profit by the end of March, 2003, stood at Rs 23.20 crore, while by the end of the first half, September this year, the company's net profit stood at Rs 9 crore.

Officials expect that the net profit will grow by the end of this fiscal year against the Rs 23.20 crore of the last fiscal year.

GIPCL registered a 15 per cent growth in turnover in the fiscal year 2002-03 at Rs 971 crore compared to Rs 841.18 crore in the previous year.

Vadodara-based Rs 80 crore Diamond Cables Ltd (DCL), which has recently restructured its debt with the consortium of banks, has decided to go for a public issue and a rights issue.

"While the public issue is expected to raise Rs 10 crore, the rights issue too is expected to raise another Rs 10 crore and the company will put in the remaining funds through its surplus. Both the public and rights issues are expected in the first week of April and the further formalities are being worked out now by the lead managers," said Amit Bhatnagar, managing director of the company here on Monday.

Another Vadodara-based firm, M S Khurana Construction Company Ltd, is also learnt to be considering a proposal for an IPO.

Sources said the company may finalise the modalities by the end of February.

Netvision, an Ahmedabad-based software company which has not been doing well for the last three years, is now planning to go for selling out its equity.

Vishal Exports Ltd, also an Ahmedabad company, may go public. However, the company officials declined to comment on the issue.

Alka Spinners, based in Ahmedabad, has decided to go for a rights issue not exceeding 25 crore equity shares of Rs 1 at a price not less than Rs 1 per share.

"The company has recently decided to increase its authorised share capital from Rs 250 million to Rs 1,000 million," said a source.

Gujarat Earth Ltd, also based in Ahmedabad, will go for a rights issue during the first quarter of the current calendar year.