Abhishek Mills to launch own brands by 2008

Kolhapur-based Abhishek Mills Limited (AML) is planning to enter the branded readymade garment (RMG) segment by 2008.

Presently, the textile and construction company manufactures cotton yarn and intends to carry a forward integration project.

AML operates in 100 percent cotton yarn manufacturing through its 100 percent export-oriented spinning unit in Kolhapur.

The company plans to begin expanding the unit once its public issue, to generate around Rs 4 crore, hits the capital market. Priced at Rs 95 to Rs 110, it is offering 41 lakh equity shares of Rs 10 each. The offer is open between February 20 and February 26, 2007.

Managing director Anasaheb Mohite said, "We are planning to enter the branded readymade garments segment once all the expansion plans are in place. From spinning yarn to weaving, and finally designing our own RMG, we will come out with our own brands probably by next year."

As part of its expansion, Abhishek Mills aims to raise its yarn production capacity from 33,120 spindles to 45,120 spindles by January 2008 at its Kolhapur plant. The project, worth Rs 218.78 crore, will be financed from the public issue proceeds, term debts and internal accruals, said Mohite.

Of the net offer to the issue, 50 percent will be offered to qualified institutional buyers, five percent to employees and the rest to shareholders.

Mohite also said banks like State Bank of India, Bank of Baroda and UTI Bank had shown interest in QIB. The company has diluted around 29.27 percent of equity for the issue.

AML earned a profit of Rs 12.81 crore in FY06 and posted a turnover of Rs 78 crore, of which Rs 42 crore was from its textile operations and Rs 36 crore from its construction division.

It expects a turnover of around Rs 105 crore in the current year.