Servalakshmi Paper Ltd., engaged in manufacturing printing, writing paper and newsprint, is entering the capital market on Wednesday (April 27) with a public issue to mobilise Rs. 60 crore through the 100 per cent book-building process. The price band for the issue has been fixed at Rs.27-29 per share of Rs.10 each. The issue closes on April 29.
Addressing presspersons here on Tuesday, R. Ramaswamy, Chairman, said the company, belonging to the Servall group, had already set up an integrated paper mill at Kodaganallur village, Tirunelveli district in Tamil Nadu with a capacity to produce 300 tonnes a day, that is, 90,000 tonne per annum. To ensure consistent availability of power, the company had installed a 15 MW multi-fuel captive power plant.
He said out of the total estimated investment of Rs. 340 crore, the company had already spent Rs. 280 crore in Phase-I and commercial production had commenced from April this year.
He said the Servall group had presence in all verticals, namely, paper machinery manufacturing, paper manufacturing, project consultancy and turnkey project implementation and had built and supplied 35 paper machines of various capacities to paper mills in India. The paper industry had grown at a CAGR of 6 per cent in the last few years and was projected to grow at a CAGR of 7.6 per cent in the next 2-3 years, he added.
The Chairman said Servalakshmi Paper was planning to produce wide range of printing and writing papers and high-end newsprint under its own brand ‘Lakshmi'. It was also planning to produce coated, uncoated, copier, maplitho, computer stationery and the like. Mr. Ramaswamy said the company was the first mill in India to introduce POM technology from Finland in stock preparation, which saves energy and reduces cost of production.
Mr. Ramaswamy said the company was now in the process of implementing Phase-II of the project.
The proceeds of the proposed issue would be spent on buying balancing equipment for producing value-added products, which will lead to enhance the capacity to 1.08 lakh tonnes per annum and also augmenting working capital expenses. During the seven months ended October 31, 2010, the company reported a total income of Rs. 52.55 crore and a profit before depreciation of Rs. 2.32 crore.