R S Iyer (KR Choksey) - Apply SEL Manufacturing is an average issue. People can apply for the issue for listing gains.
SP Tulsian(Investment Advisor) - Apply The company is now expanding its capacities with an outlay of Rs 184.57 crore, and post expansion the capacity of the company would rise to 74,256 spindles, 7.50 million pieces per annum of garments, 7,050 TPA of knitted fabrics per annum and 3,000 TPA (unchanged) of fabric processing and dyeing. The expansion is being carried out in two phases with first phase of Rs 73.23 crore having commenced production from March 07. Next phase with outlay of Rs 111.34 crore would commence production in phases from August – September 07.
Apart from these expansions, the company has also lined up almost 100% expansion in yarn making and processing capacity for Rs 410 crore which is proposed to be financed from term loan of Rs 273.50 crore and internal accruals of Rs 136.50 crore. One fails to understand the necessity of revealing these expansion plans, as it has no relation, whatsoever, with the present, expansion plans or the proposed issue. Won’t this be termed as future projections, merely to lure the prospective investors by revealing its ambitious growth plans?
Considering all these, the conclusion is that the company is an established player, though not very high profile but with good profitability. EPS for FY 07 of Rs 24 installs confidence. Availing rupee term of Rs 104 crore, under TUFS for an expansion of Rs 185 crore is also noteworthy. Though the textile stocks are not highly fancied by the market, this company is good as the share is reasonable priced. Even at the upper band of Rs 90, share merits attention.
I strongly tell u people to apply in this issue.After wasting u'r funds by not getting allotments in hi-fi issues such as Vishal Retail,Everonn & now Simplex,one should put money in this issue. Do u know ,who is the HNI who has taken a pre-issue placement ? If not,then mark my words this issue has all the substance to give u the returns which u will never imagine.Just ask the allotees of an earlier issue of Pyramid Saimira Theatre Ltd. (PSTL),where this very HNI had acquired shares in a pre-IPO placement & after listing had given four-fold returns.So dear friends forget TAKE Solutions (as allotment is going to be a lottery-will get heavily over-subscribed), & apply in this issue.
Money Control Review: SEL Manufacturing Co. Ltd. IPO opens on 26th July
SEL Manufacturing Company Ltd., a vertically integrated textile multi-product company, manufacturing and exporting cotton yarn, knitted fabrics and knitted garments, proposes to expand its capacities in garment manufacturing, knitting and spinning at a total cost of Rs.184.57 cr. Post expansion, the company will have 74,256 spindles, 7.5 million pieces per annum of garments and 7,050 tonnes of knitted fabrics per annum.
To part finance this expansion, the company proposes to enter the capital markets with a public issue of 41,38,410 equity shares of Rs.10 each through 100% book building process. The issue opens on Thursday, 26th July and closes on Tuesday, 31st July 2007 in the price band of Rs.80 to Rs.90 per equity share. The equity shares are proposed to be listed on BSE and NSE.
EXIM Bank has subscribed to 7,60,800 equity shares of Rs.10 each at Rs.65 per equity share including a premium of Rs.55 per share. This equity stake will be 5% of the fully diluted paid capital of SEL after the IPO. Besides this pre-IPO equity participation, EXIM Bank has also sanctioned a term loan of Rs.25 cr. for the expansion project. Further, the company has fully tied up debt component of Rs.103.79 cr. under the TUFS. Another HNI investor has also participated to the pre-IPO placement of SEL by subscribing to 5 lakh equity shares of SEL at a price of Rs.75 per equity share.
SEL manufactures and exports all types of knitted garments including t-shirts, polo shirts, boxer shorts, thermals, girls top etc. a part of yarn produced from its spinning units are captively consumed for its knitting operations and balance is sold in both domestic as well as overseas market. Over the last few years, SEL has de-risked its business model from being a garment manufacturer of being a fully integrated textile company, from being a one product company to being a multi product company and from being dependent only on exports to a company having diversified domestic and overseas market. The manufacturing facilities of the company are based in Ludhiana in Punjab and Baddi in Himachal Pradesh. SEL is exporting 100% of the garments that it produces.
SELs total income has increased from Rs.64.34 cr. in FY05 to Rs.201.88 cr. in FY07 at a CAGR of 77.13% and its profitability has increased from Rs.3.15 cr. in FY05 to Rs.23.7 cr. in FY07 at a CAGR of 174.47%.
Dear all, In my opinion this sector is not doing well for longtime, Dont burn ur hard earned money in textile sector. I have seen many ppl doin the same. Avoid this for timebeing. Issue object is not clear. $/Rupee hit is also factor.
Textile is not a good sector to invest now a days. Eventhough company is making profit.look towards arvind mill. It is no.1 company in india but its available at below 50/-...few times it was sell above 100/-.so take care before investing in textile sector.