Madras Fertilisers

Based upon its performance, it is hardly surprising to find the entire issue being underwritten by the Industrial Development Bank of India (IDBI).

This reflects the players' stand that the issue could face an uphill task where subscription goes.

What else could have caused the underwriting?

Political compulsions seem to have dictated the IDBI's move. Not only has the institution provided the term loan, it has also underwritten the issue to the tune of Rs 26.98 crore out of total issue size of Rs 42.94 crore.

The debt equity ratio as on September 30, 1996, stands at 3.45 times. On the company's existing cash flow position, repayment of debt looks a difficult proposition.

 

The cash flow projected for 1996-97 is a meagre Rs 17.91 crore out of which, Rs 11.62 crore is being used to fund the project cost.

Future financial projections are not provided making it difficult to know company's profitability and cash flow position.