Vishwaraj Sugar to launch IPO for raising up to Rs 374 cr

Karnataka-based Vishwaraj Sugar Industries plans to hit the capital market in February-March with initial public offer (IPO) to raise up to Rs 374 crore for doubling its production capacity.

The company has an integrated plant at Belgaum district with a sugarcane crushing capacity of 5,500 tonnes per day.

"We are planning to launch our IPO in February or March," company's Executive Director Mukesh Kumar said.

Market regulator SEBI has given its nod to launch the IPO, he added.

"We plan to raise up to Rs 374 crore. The company will use the proceeds of the IPO for expansion, which include doubling the cane crushing capacity to 11,000 tonnes per day (TCD) from the present 5,500 TCD," Kumar said.

The company would also expand the distillery capacity to 1,00,000 litre per day from the current 35,000 litres per day, which would lead to doubling of IMFL (Indian Made Foreign Liquor) production capacity to 5,000 boxes per day, Kumar added.

The company would utilise part of IPO proceeds to expand its power co-generation capacity to 66 MW from current 36 MW.

Apart from IPO funds, Kumar said the company would take a bank loan of Rs 70 crore to meet the total expansion cost of Rs 425 crore.

"At present, we have surplus power of 22 MW, out of which 14 MW is sold through Tata Power Trading Company while the balance is sold to Hubli Electricity Supply Company (HESCOM)," Kumar said.

Vishwaraj Sugar posted a net profit of Rs 51.59 crore over a turnover of Rs 425.81 crore during 2011-12 fiscal. The company has association with farmers of 49 villages for assured supply of sugarcane.