Redington India to raise Rs 150 crore via float

Redington India, a leading distributor of IT products, plans to come out with a public issue of 13,231,000 equity shares of Rs 10 each to raise around Rs 125-150 crore through 100 per cent book building process in the price band of Rs 95-113.

The issues, which opens on January 22 and closes on January 25, shall comprise 16.99 per cent of the fully diluted post-issue capital of the company.

Redington proposes to utilise funds to establish four automated distribution centres (ADCs) and 68 service and repair centres (SRCs) in India, set up an ADC in Dubai and install an enterprise resource planning (ERP) system for operations in the Middle East and Africa through investment in its wholly-owned subsidiaries "" Redington Gulf FZE and Cadensworth (India).

"We plan to invest Rs 5 crore in building the SRC for LCD monitors in Chennai and invest about Rs 42 crore in our Gulf subsidiary," said R Srinivasan, managing director. Redington clocked Rs 3,692.65 crore in 2005-06 with a CAGR of 37.14 per cent.

The company's standalone net profit from its India operations has increased from Rs 14.92 crore in 2003-04 to Rs 29.12 crore in 2005-06 with a CAGR of 39.72 per cent.

With the logistics market pegged at Rs 7,000 crore in 2005, Redington plans to leverage its core competencies such as logistics, inventory management, order fulfilment, credit management, to other non-IT products too.

Recently, it started distribution of mobile handsets and accessories in Nigeria and in limited territories of India. Apart from distribution, the company also provides support services for IT hardware and mobile phones.

Apart from this the company also forayed into digital presses with HP, gaming consoles with Microsoft XBox and into consumer durables. Srinivasan also remarked that they plan to enter into the markets of Vietnam, CIS and Central Europe.

In India, Redington has 10,474 partners, 35 sales office, 53 warehouses, 43 service centres and 40 partner centres. It has presence in 16 countries with a channel strength of 2,755.