Salient Points of GDR:
- Issue Size: US$ 27 Million
- Listing: Luxembourg Stock Exchange
- Purpose: Capacity Expansion of Rainbow Papers by 125,000 MTPA and Installation of a Thermal Power Plant of 30 MW
Rainbow Papers Ltd, a BSE listed (BSE Code: 523523) company is one of the leading manufacturers of paper and paper products in Gujarat India. The company is proposing to issue Global Depositary Receipts (GDR) to raise nearly $27 million to fund its expansion programme. The GDR is proposed to be listed on the Luxembourg Stock Exchange.
There is a surge in the demand of paper in the Indian Market due to increasing urbanization, emphasis on education and rising consumerism. The proceeds of the offer will be used to undertake capacity expansion of Rainbow Papers, the total cost of which is estimated to be Rs.327 Cr. In addition to the GDR issue, the Company has tied-up debt worth Rs.200 Crore from Banks for the project. The Company has also contributed Rs.3 Cr from its internal accruals to complete the financial closure of the project.
Commenting on the intention of the Luxembourg listing of Rainbow Papers GDR, Mr. Ajay Goenka, Chairman and Managing Director, Rainbow Papers said, “After expansion Rainbow Papers would be amongst the few paper companies in India to manufacture all kinds of paper at a single location. Raising GDR will help in expediting the company’s expansion plans and provide enhanced integration of its manufacturing activities.”
Rainbow Papers has already started the civil works for installation of an imported Voith-make fully automated, continuous-process paper plant of capacity 350 TPD from Germany. This plant is a multi-product, multi-feed plant, capable of working on pulp as well as waste-paper.
On completion of the above stated expansion program, Rainbow Papers would have completed one of the most cost effective capacity-expansion programs in the Indian Paper Industry. It would be amongst the few paper manufacturers in India, manufacturing more than 186 different kinds of paper at a single location, with a capacity of nearly 305,000 MTPA.
The Company consistently exports to leading markets of the US, Middle East, South Africa, South East Asia and U.K and nearly a quarter of its turnover is derived from markets outside India.
The company is also adding a 30 MW Thermal Power plant to its existing capacity of 15 MW, proposing to increase the total installed capacity to 45 MW. The power generated by the new power plant will be partly used for running the capacity additions and partly will be available for merchant sale.
About Rainbow Papers:
Rainbow Papers Ltd, is a BSE listed (BSE Code: 523523) Ahmedabad-based Company engaged in the business of manufacturing of paper and paper products. The company is accredited with ISO 9001, 14001 & OHSAS 18001.
