Dozen small and mid-sized Gujarat players aim IPO

Close to a dozen small and mid-sized Gujarat based companies are preparing ground to hit the capital markets in the next six months or so. While some have begun the spadework by filing draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI), others are in talks with merchant bankers and lead managers for an initial public offer.

"Over a dozen players are planning to hit the capital markets in the next few months. In all they could be raising close to Rs 1,500-Rs 2,000 crore," said industry sources privy to the development.

The players who are mulling an IPO include Liverpool, Pradeep Overseas, Sai Infosystems (India) Limited (SIS), Hi-Rel, Timbor Home Pvt Ltd, Sahajanand Laser Technology and John Energy, sources in merchant banking said.

A leading hotel chain is also considering to hit capital markets soon with a public offering. Besides, a pharma player and an Ahmedabad IT company are also evaluating the prospects of raising money.

"Some players might come up with an IPO to provide exit route for the private equity players who have invested in them," sources said.

Most of these players had planned their IPOs over a year ago, however the economic slowdown had played a major dampener, forcing them to hold back their plans.

Ahmedabad-based manufacturer and exporter of home-linen Pradip Overseas Ltd has meanwhile revived its plans to come out with IPO. The company intends to raise about Rs 100 crore through the public issue.

The company had filed the draft herring prospectus in December 2008.

"The clearance is underway and we are expecting SEBI's nod in one month", said officials of the company. Pradip Overseas is looking at diluting 25 per cent equity. It plans to utilise the proceeds of the IPO for setting up a new unit dedicated to home-linen production. The 1 lakh meter per day unit will come up at Pradip's special economic zone at Bagodara, which is 50 kms away from Ahmedabad.

Ahmedabad-based Sai Infosystems (India) Limited (SIS), an IT solution provider, plans to file a DHRP by September this year and hopes to come out with a public issue by the last quarter of the current fiscal 2009-10.

Moreover, SIS has also revised its investment plans for the various projects and now intends to raise Rs 200-300 crore instead of Rs 100 crore as planned earlier.