Furniture-maker Timbor made a strong debut on the stock exchange,

listing 14 per cent above the issue price of Rs 63 and ended day 1 at

Rs 91.2 a share at the BSE on Wednesday – over 44 per cent higher than the IPO price. The company is now valued at around Rs 134 crore ($30 million). While this translates into unrealised gains for one of its investors, another is still underwater. But this has to do with the timing of the investments.

DB Corp had picked the stake in October, 2008, weeks after the collapse of Lehman Bros, and invested around Rs 4 crore with an average cost price of around Rs 144 per share. Although the investments came in when market valuations were headed towards hitting a low, the agreement would have been sealed ahead and thereby, at high valuations, which could not be sustained post-economic slowdown.

On the other hand, Bennett, Coleman & Co. picked a much larger chunk of shares at far lower price in February, 2010. The firm invested around Rs 2.34 crore directly and another Rs 65 lakh through another entity, taking its total commitment to around Rs 2.99 crore and picked as much as 29.59 per cent stake. Bulk of these shares was acquired at par value, bringing down its average cost of purchase to just around Rs 9.1 per share.

At the latest market price, the Dainik Bhaskar group has lost 36 per cent of its investment value while Bennett, Coleman & Co. is sitting on unrealised gains of 10x, according to VCCircle estimates.

The issue itself got a reasonable welcome, surprisingly from retail investors, who lapped up more than what was reserved for them on Day I itself – thus subscribing to around half of the total issue. The company raised as much as Rs 23 crore in the maiden public float and planned to use the proceeds from the issue for machinery purchase, establishing new stores across India and meeting additional working capital requirements.

For the year ended March, 2010, the firm had a total income of Rs 51 crore with net profit of Rs 1.77 crore. The company, which was incorporated as Inside Outside India Dot Com Pvt Ltd during the days of the dotcom boom, was renamed around four years ago. It has three manufacturing units in Gujarat and manufactures a range of kitchens & kitchen components, furniture, doors & door frames, kitchen baskets and accessories. The company operates as a manufacturer-retailer, with 80-plus exclusive retail outlets operating on a franchise model. Timbor markets its products under the brand names Timbor Cucine (modular kitchens), Timbor Doors (doors & door frames), Timbor Home (home furniture) and IKI Kitchens (hi-end kitchen solutions using ‘Hettich’ hardware and accessories).

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