Madhya Pradesh-based mid-size polymer products company Flexituff International is coming out with its IPO next week, with investor Clearwater Capital Partners making at least 40 per cent gain on its equity investment. Flexituff has set its price band at Rs 145-Rs 155 per share and the issue may raise up to Rs 105 crore, which includes a share sale by Clearwater. The issue opens on September 29 and closes on October 5.
Around two-thirds of the issue is a fresh fundraising for Flexituff’s expansion plan while Clearwater will sell over 2.2 million shares to rake in an amount between Rs 32.62 crore and Rs 34.87 crore. Flexituff is expected to mop up between Rs 65 crore and Rs 70 crore through the IPO. The issue will bring down Clearwater Capital’s stake from the current 25 per cent to around 11 per cent.
Clearwater, which seeks deals in special situation and distressed or undervalued assets, had invested Rs 46 crore in the company in January 2008 through convertible debentures.
The post-issue valuation of Flexituff will be Rs 315 crore on lower end and Rs 336.5 crore on the upper end of the price band.
The company intends to use bulk of the funds raised in the IPO for meeting working capital requirements (Rs 25 crore), besides expanding the manufacturing facility at Pithampur (Rs 18.9 crore) and enhancing other projects.
Flexituff reported 77 per cent increase in consolidated sales to Rs 618 crore with profit before tax increasing nearly fourfold – from Rs 8.9 crore in FY10 to Rs 34.2 crore in FY11.