Indian Stock Market

The Kerala based V-Guard Industries said on Wednesday that the company would be going ahead with its initial public offer.

Mr Kochouseph Chittilappilly, Managing Director, V-guard, told reporters here on Wednesday that despite the current bearish market conditions, the company has decided to stick to its schedule. The issue opens on February 18.

“Ours is a small issue (as compared to the mega IPOs) and we are quite confident of our pricing,” he said.

‘Not offering a dream’

Several IPOs have been either cancelled or deferred in the past few weeks due to poor investor response. There are others who have reduced the price band.

But V-guard has stuck to its original plans. “We are not offering a dream… we are offering an asset,” said Mr C.J. George, a director of the company.

The company, a manufacturer of electrical and electronic products, is offering 80 lakh equity shares of which four lakh equity shares have been reserved for employees. The price band for the issue has been fixed between Rs 80 and Rs 85.

The company is expecting to raise Rs 68 crore at the upper end of the price band and Rs 64 crore at the lower end. The shares of the company are proposed to be listed on the BSE and NSE. “We have been in this industry for over 30 years and enjoy a good brand image in the markets. We feel that due to the brand name of the company the issue will get a good response from both the institutions and the retail investors,” Mr Kochouseph said.

Fund use

The proceeds from the issue will be used to set up cable manufacturing facilities in Coimbatore and Uttaranchal, an enamelling plant at Coimbatore, a development and pilot production plant for water heaters, fans and pumps at Himachal Pradesh and Coimbatore, and service and distribution centres in Bangalore, Hubli and Vijaywada.

From the issue, 50 per cent will be reserved for the qualified institutional buyers, 15 per cent for the non-institutional investors, and 35 per cent for the retail investors, reports The Hindu Business Line