Opto Circuits to set up specialised manufacturing unit in Bangalore

Opto Circuits (India) Ltd (OCIL), the Bangalore-based manufacturer of healthcare equipment, plans to set up a highly-specialised facility to manufacture printed circuit boards (PCBs). The facility is being set up in Bangalore as part of its R&D programme.

"We require a large number of PCBs of highly complicated configuration in many of our products. Keeping in view the level of accuracy required and also the delivery schedules, it is planned to establish in-house PCB assembly facility with sophisticated equipment such as SMT machines, screen printers, feflowovens among others," chairman and managing director Vinod Ramnani told reporters here on Monday.

Opto Circuits manufactures digital thermometers, sensors, probes, pulse oximeters, patient monitoring systems. Ramnani said that the company also proposes to upgrade its R&D facility to understand the emerging technologies and methods, and build applications around the existing and new generation products. The proposed R&D facility, being set up in an area of five acres, will require an investment of Rs 13.38 crore.

Opto Circuits recently completed the acquisition of Germany-based EuroCor GmbH, a manufacturer of cardiac stents of various types, including drug eluting coronary stents used in critical cardiac care. The company has so far made a payment of Rs 22.71 crore for acquiring shares from the existing shareholders of EuroCor.

"With the acquisition of EuroCor GmbH, we have enhanced our product portfolio and also extended our presence in the invasive arena of healthcare products. On the other hand, we can utilise EuroCor's distribution network spread across 26 countries to enhance our reach to distribute our products," Ramnani said.

To fund its other activities such as upgradation of infrastructure and set up additional plant and machinery and establish marketing offices and repay the short-term loan availed from the State Bank of India to fund the acquisition of EuroCor, Opto Circuits is coming out with a follow-on public offer (FPO) of four million equity shares of Rs 10 each for cash at a premium. The price is to be determined through the 100 per cent book-building process.

The FPO will open for subscription on March 31 and closes on April 5. Of the total issue, 4 lakh equity shares are reserved for employees of OCIL in India and its subsidiaries, while another 4 lakh shares are reserved for existing retail shareholders of OCIL. Of the net issue of 32 lakh shares on offer, 50 per cent (16 lakh shares) will be offered to qualified institutional buyers (QIBs) on a proportionate basis, of which 5 per cent will be allocated to mutual funds (MFs). The balance will be available for allocation to both QIBs and MFs.

Not less than 15 per cent (4.8 lakh shares) of the net issue will be available for allocation to non-institutional investors on a proportionate basis, while not less than 35 per cent (11.2 lakh shares) of the net issue will be available for allocation on a proportionate basis to retail investors.

In 2000, the company raised Rs 10 crore through its initial public offer (IPO). The company declared a dividend of 30 per cent for 2000-01, 2001-02, 2002-03 and 2003-04. For 2004-05, the dividend was enhanced to 35 per cent. Shareholders have also received bonus in the last four years "� 1:10 in 2001-02, 2:10 in 2002-03, 3:10 in 2003-04 and 1:2 in 2004-05.

Of the present equity of Rs 26.81 crore, promoters hold 30.98 per cent, while MFs and FIIs hold 13.98 per cent. Private corporate bodies hold 14.94 per cent, NRIs/OCBs hold 12.39 per cent, while the rest is held by the Indian public.

The FPO of OCIL will constitute 12.99 per cent of the fully-diluted post-issue paid-up capital. The post-issue paid-up equity capital of OCIL will stand at Rs 30.81 crore.