CorpBank picks up shares in Astral

By subscribing to 1,80,000 shares of Ahmedabad-based Astral Polytechnik, Corporation Bank has invested in a company at the pre-IPO stage for the first time.

The bank whose shares would be under the lock-in period for one year from the date of listing has taken the shares at a 10 per cent discount.

Astral Polytechnik, which claims to have a 70 per cent market share in the chlorinated poly vinyl chloride (CPVC) piping and plumbing segment in India, is taking the IPO route to fund its expansion of facilities and product line.

The company will utilise the net proceeds of the issue to part finance the expansion project of its business of CPVC pipes and fittings and also to finance manufacturing facilities of its upcoming products namely Astral underground systems, Astral Blazemaster fire sprinkler system and Astral SWR.

The expansion would take place in two phases and will take the company's manufacturing capacity from 4,000 metric tonne (MT) to 18,479 MT after its completion.

Currently, the piping manufacturing segment has three players in the estimated plumbing market of Rs 3,000 crore in India. CPVC, which is the core product of Astral with 80 per cent of revenues coming from that segment is, however, still a minuscule market in India as compared to the galvanised iron (GI) market, which comprises 90 per cent of the plumbing market.

Having acquired international quality licences with Noveon IP Holdings Corp and others, the company estimates that CPVC will see a 60-70 per cent growth this financial year akin to the US market, which is now leaning towards CPVC.