Bangalore, Karnataka, India, Wednesday, November 12, 2008 -- (Business Wire India) -- Brickwork Ratings has assigned BWR IPO Grade �3� for the proposed initial public offering of Jindal Cotex Ltd. This grade primarily reveals �Average Fundamentals� in relation to other listed securities in India. Brickwork Ratings IPO grading is a mere opinion on the fundamentals of issuer and is just one parameter that an investor could use before the investment decision. The specific decision relating to invest must also consider the investor�s risk profile, asset allocation, time horizon as well as the issue price, relative to the fundamental value. Brickwork does not comment on the price. The grade is neither a recommendation to buy / sell nor hold the graded instrument.
The Shares offered to public is 12,453,894 (about 12 million) Shares Face Value Rs.10/- each, representing 49.81% of post issue equity.
The Lead managers Registrar are Saffron Capital Advisors Private Limited and Bigshare Services Private Limited.
Background
Jindal Cotex Limited (JCL) offers 12,453,894 (about 12 million) Shares Face Value Rs. 10/- each, representing 49.81% of post issue equity. The present issue is being made to raise the funds for setting up a new facility for manufacturing of Cotton Yarn, Yarn Dyeing and Garments and to invest in Subsidiaries Jindal Medicot Limited and Jindal Specialty Textiles Limited. The company has not contemplated to use the proceeds to repay the bank loans.
Company profile
Jindal Cotex Limited (JCL) based in Ludhiana, Punjab, incorporated in 1998 has been promoted by Mr. Sandeep Jindal, Yash Paul Jindal, Rajinder Jindal and Ramesh Jindal. JCL is an ISO 9001:2000 certified company engaged in the business of manufacturing of Acrylic, Polyester, and Polyester-Viscose, Polyester Cotton, combed and carded yarns used in apparels, suitings & knitted fabrics. It has an installed capacity of 23,472 spindles for acrylic, cotton blended and polyester yarns with a manufacturing capacity of 6500 TPA. JCL manufactures and sells yarns under the trade name �JINDAL�. In addition, the company has installed and commissioned Wind Electric Generator (Wind Mill) of 1250KW capacity at Pithla-Satta-Gorera in the state of Rajasthan.
Prospects
The grading reflects JCL�s consistent revenue growth and profits over the past 5 years, the promoters experience and ability to consistently grow the company by expanding the capacities, product profile and to identify and execute new opportunities for business growth.
Constraints
The grading is however constrained by project implementation risk leading to cost and time over-runs, business concentration with few customers as well as competition from large and small players in the domestic and International markets.
IPO Proceeds usage
The IPO proceeds will be used for the expansion of its capacity by 50,400 spindles along with a dyeing unit of 6TPD and garment manufacturing facility having a capacity of 3000 PC per day. The IPO proceeds would also be used to invest in its 100% subsidiaries in the field of Technical and Medical Textiles viz. Jindal Medicot Ltd and Jindal Specialty Textiles Ltd.
Financials
For the year ended 31st March, 2008 sales from operations increased by 42.69% to Rs. 994.24 million as compared to Rs. 696.78 million for the year ended 31st March, 2007.
Profit before Depreciation, Interest and Tax increased from Rs. 63.11 million to Rs. 96.72 million for the year ended 31st March, 2008 showing a increase of approximately 53.26%.
Profit after Tax increased from Rs. 8.76 million for the year ended 31st March, 2007 to Rs. 42.31 million for the year ended 31st March, 2008 showing an increase of 382.99%.
EPS (Earnings per share) for the year ended 31st March, 2008 is Rs.6.04 against Rs.1.26 in the corresponding previous financial year. EPS has been calculated on the basis of weighted average number of Equity Shares.
The operating profit margin is 21.98% for the year ended 31st March, 2008 as compared to 19.62% for the corresponding previous year.
Summarized financial statements are in Annexure -1 to this press release.
The pre-issue and post- issue shareholding is summarized below.
Summary of pre-issue and post-issue shareholding
Brickwork Ratings IPO Grading
Brickwork Ratings IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects Brickwork Ratings�s independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from Brickwork Ratings Research.
Zerodha (Trading Account)
RHP
