Chennai-based electric vehicle maker Kabirdass Motor Company is coming out with what could be the first IPO in the auto sector in years. The two year old start-up which is promoted by Murali Kabirdass who has business interests in the area of die casting, foundry and auto components also has the backing of Bennett Coleman & Company Ltd (BCCL), through its private treaties wing which strikes ad for equity deals with small and mid size firms.
BCCL had subscribed to zero coupon convertible debenture worth Rs 20 crore in June 2008 which is compulsorily convertible into equity by July 2010 or prior to that in case the company comes out with an IPO. The debenture would be converted into shares just prior to IPO at a mutually acceptable price which is likely to be close to 80% of the lower end of the price band for the IPO when it happens.
The company is looking to raise around Rs 81 crore through the issue which includes Rs 20 crore as BCCL’s contribution when the issue is floated. So net proceed targeted from the issue is around Rs 61 crore. Keynote Corporate Services and Canara Bank are the two book running lead managers to the issue for which the firm filed a draft offer prospectus with Sebi today.
Kabirdass which sells electric two wheelers under the brand name Xite in South India is looking to raise funds for expanding operations. Its total anticipated requirement of funds for now is around Rs 100 crore of which it is raising Rs 20 crore through bank term loans and the rest through the equity route as mentioned above.
For the year ended March 09, Kabirdass had revenues of Rs 2.69 crore with net profit of Rs 18 lakh. Its net worth as of March end was Rs 7.9 crore. The firm is in the process of constructing the plant and production is expected to begin only after March 2010, by when the manufacturing unit is expected to be ready.
The authorised share capital of the firm stands at 2.2 crore shares of which 1 crore is the present issued capital. If the authorised share capital(which was enhanced as recently as March 31, 2009) is not revised upwards before the IPO, the total shares under issue could be a maximum of 1.2 crore which would mean the company may be looking at an issue price of somewhere between Rs 67-100/share.
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