Diamond jewellery maker C.Mahendra Exports Ltd plans to raise up to 1.65 billion rupees via its initial public offering and has fixed a price band of 95-110 rupees per share for the offer.
A host of gem and jewellery companies such as Thangamayil Jewellery, Shree Ganesh Jewellery House and Goenka Diamond & Jewels have tapped the primary market for funds since the start of 2010.
The Gujarat-based C.Mahendra Exports, which is involved in sourcing, trading, processing and manufacturing of diamonds and diamond jewellery, is offering 15 million shares in the IPO.
The issue, which opens on Friday and closes on Jan 6, will constitute 25 percent of the fully diluted post-issue paid-up capital of the company.
The diamond jewellery maker plans to use the part of the proceeds to set up a diamond processing unit in Gujarat, and a jewellery manufacturing unit in Mumbai.
"The capacity of the diamond processing unit will be similar to what it is currently at our other two units combined...our new jewellery manufacturing unit will have a capacity of 8,000-10,000 carats," Managing Director Sandeep Shah said.
The new diamond processing unit will have a total installed capacity of 120,000 carats. It currently has two such units in Gujarat.
It will also use the funds to set up retail outlets, develop the brand and to meet working capital requirements.
The company plans to scale up its retail outlets to 28 by 2013 from nine now, Shah said.
In 2010, the company's income from operations rose 21 percent to 18.53 billion rupees and EBITDA narrowed to 979.1 million rupees from 1.61 billion rupees a year ago.
YES Bank and Anand Rathi Advisors Ltd are the book running lead managers for the issue.