Rushil Decor plans to raise Rs 39 cr via IPO

Rushil Decor Ltd, a company engaged in manufacturing of decorative laminated sheets and plain particle board, plans to raise around Rs 39 crore through its initial public offer (IPO), which opens for subscription on June 20 and closes on June 23, 2011.

The company intends to utilise the proceeds of the IPO to partly fund its expansion project. Rushil Décor is now diversifying into medium density fibre (MDF) board manufacturing. The company is in the process of setting up a new plant at Amble industrial area of Chikmagalur in Karnataka. "The total project cost is estimated to be Rs 73.38 crore and the plant will have an installed capacity of 90000 cubic meters a year," Krupesh Thakkar, managing director, Rushil Decor Ltd, said while announcing the company's IPO today in Ahmedabad.

 

The company currently has four manufacturing plants in Gujarat, which include three near Gandhinagar and one at Surendranagar. The company produces decorative laminated sheets in plants near Gandhinagar and manufactures plain particle board at Navalgadh Village in Surendranagar.

The company has fixed the price band of Rs 63 to Rs 72 per equity share.

The company's entry into the MDF segment of the market follows the favourable demand outlook for engineered work products. MDF is widely used in the manufacture of furniture, cabinets, door parts, moldings, millwork and laminate flooring. MDF panels are manufactured in a variety of dimensions and densities, providing the opportunity to design the end product.

The furniture market in India is worth Rs 60000 crores with organised accounting for just Rs 2000 crore a year.Presently, large quantity of MDF Board and Particle Board is imported from Europe, Sri Lanka and South East Asia. These imports have a high landed cost on account of high cost of logistics and import duty.

In 2009-10, the company achieved sales turnover of Rs 95 crores of which exports accounted for Rs 50 crores. In the fiscal 2010-11 up to December 2010 the company turnover stood at Rs 87 crores.