Monday, April 22, 2013

Scotts Garments IPO

Scotts Garments, a garment manufacturer, has come out with an IPO of 1,05,06,954 equity shares of face value of Rs 10 each and intends to raise Rs 139 crore through the issue.  The company is mainly engaged in producing woven, knitted & denim garments. It has 15 factories and state of the art textile mills based in Karnataka and Tamilnadu.

The IPO shall open on 25 April, 2013 and was slated to close on 29 April, 2013. The company had fixed the price band of the issue at Rs 130-132 a share. However, due to poor response, the company has revised the closing date as 3 May, 2013 and revised the price band to Rs 118-120 a share.

The company intends to use proceeds of the IPO for setting up of unit for trouser manufacturing at Doddaballapur, Karnataka and knitting and fabric processing unit at Kagal, Kolhapur; margin money for working capital of new units; and general corporate purposes.

Keynote Corporate Services is the book running lead manager and Canara Bank - Merchant Banking Division is the co-book running lead manager. Link Intime India Pvt Ltd is the registrar to the issue. Equity shares of the company are proposed to be listed on BSE and NSE.

Recommendation:

CARE has assigned grade 3 to the IPO indicating average fundamentals. We do not recommend this IPO to investors for now.

Subscription:

The issue was withdrawn after poor response from investors.


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