Bajaj Corp Limited, a leading producer of hair oils in India, is to enter the capital markets with an initial public offer (IPO) of 45 lakh equity shares of Rs. 5 each. The price band has been fixed at Rs. 630-660.
The issue opens on August 2 and closes on August 4 for qualified institutional buyers (QIBs) and on August 5 for retail and non-institutional bidders. The issue, which will be through a 100 per cent book building process, will constitute 15.3 per cent of the post-issue paid-up equity capital of the company.
Out of the issue proceeds, Rs. 220 crore is to be used for the promotion of future products in personal care and Rs. 50 crore for acquisitions and other strategic initiatives. It seeks to leverage the success of its Bajaj Almond Drops hair oil brand by launching four products in the personal care segment. It also seeks to consolidate its position in the fast moving consumer goods (FMCG) segment by continuously evaluating acquisition opportunities.
Bajaj Corp is part of the Bajaj Group, one of the leading FMCG companies with major brands in hair care. According to a survey done by AC Neilsen, Bajaj Corp is India's third largest producer of hair oils and the largest producer of light hair oils with its Almond Drops brand achieving an Indian market share of 50.3 per cent for the fiscal year ended March 31, 2010.
The legacy Bajaj Corp extends back to 1953 when Kamal Nayan Bajaj established Bajaj Sevashram Limited (BSL) to market and sell hair oils and other beauty products. It was later demerged to Bajaj Consumer Care in 2001. Subsequently, BCCL licensed the trademarks for all its brands to Bajaj Corp pursuant to an exclusive trademark licensing agreement from April 2008.
The exclusive trademark licence is valid for 99 years from March 2008 and extendable for another ten years.
The company's total income for the year ended March 31, 2010, was Rs. 334.86 crore and net profit Rs. 83.91 crore as against Rs. 252.02 crores and Rs. 46.92 crore respectively in the previous year.
