Bedmutha Industries - IPO Note

Issue Highlights:

Price Band: Rs. 95 to Rs. 102 per share.
Issue Opens Between: September 28, 2010 - October 01, 2010.
Recommendation: None*
Book Running Lead Manager: Keynote Corporate Services Ltd.
To List on: NSE, BSE.
IPO Grading: 2/5 (ICRA).
PE: 9.37 x (based on base price)**
: 10.06 x (based on cap price)**
Market Cap Post - Listing: 214.5 Cr. or $46.6 mn (based on the cap price).
Market Cap of Free Float: 92.9 Cr. or $20.2 mn (based on the cap price).

IPO of 9 mn equity shares of Rs. 10/- each, aggregating to Rs. 91.8 Cr. or $19.96 mn (at the cap price).

Bedmutha Industries Limited (BIL) was incorporated in August 1990 as ‘Bedmutha Wire Company Private Limited’. The company is one of the leading steel wire manufacturers in western India located in Nashik. It commenced its commercial production in 1992 with erection of its first Galvanized plant with an installed Capacity of 3600 MTPA at Sinnar, Nashik.

Over the years, BIL has enhanced capacities from 3,600MTPA to 26,050MTPA by setting up three more Galvanizing lines at the existing location while Wire Drawing capacities has increased from 16,800MTPA to 60,000MTPA. The company operates four manufacturing units in and around Nashik and they are strategically located in proximity to the source of raw materials and markets ensuring cost savings and logistic benefits.

BIL has wide range of wire and wire products - Galvanized wires, Cable Armour Wires, ACSR Wires, Wire Nails, Earth Wires, Stay Wires, Spring Steel Wires, Barbed Wires, etc. The products are used in various areas such as roads, bridges, flyovers, power, automobile, engineering, agriculture, railways and defence.

The products manufactured by BIL are approved by Bureau of Indian Standards, Power Grid Corporation and State Electricity Boards. Two of its plants are certified under ISO 9001 from Bureau Veritas Certification (India) Private Limited. It has also been granted status of ‘Mega Project’ under the package scheme of incentives by Government of Maharashtra.

Strengths:

• Technically qualified promoters and experienced management team with project execution skills.
• State-of-art manufacturing facilities with latest plant and machinery ensuring high operational efficiency.
• Wide range of products catering to various industry segments like power transmission & distribution, cable & conductor industries, agriculture, automobile and ancillaries, road and railway infrastructure, defence, etc.
• Well established clientele like Sterlite Industries, Apar Industries, Finolex Cables, RPG Cables, Universal Cable, Ravin Cable, Suprajit Industries, Godrej, GTL Infrastructure, Ashoka Buildcon.
• High quality products approved by Power Grid Corporation, Electricity Boards of various States, Bureau of Indian Standards (ISI).
• Manufacturing processes are ISO certified.
• Locational advantage of manufacturing facilities, which are well connected to Highways, Railways and Port.
• BIL enjoy Package Scheme of Incentives (PSI) awarded by the Government of Maharashtra being located in the backward area for the present expansion of LRPC wire, BIL is entitled to receive Sales Tax Incentive up to 20% of the capital expenditure, exemption in stamp duty, subsidy in electricity duty by way of refund of MVAT. The Sales Tax Benefits are applicable to the company up to the year 2015. With the expansion BIL will have the extended benefit on sales tax up to the year 2017.


Thank you,
Minita Aiya
Client Service Associate
DENIP Consultants Pvt. Ltd.