Jindal Cotex IPO opens on Aug 27

Jindal Cotex will enter capital market on Aug 27 with a public issue of 1,24,53,894 equity shares.

Jindal Cotex Limited,a Ludhiana-based textile company engaged in the manufacture of polyester and acrylic yarns,will enter the capital market on August 27,2009 with a public issue of 1,24,53,894 equity shares of face value of Rs. 10/- each. The price band has been fixed at Rs. 70 to Rs. 75 per share. The IPO closes on September1,2009.

Saffron Capital Advisors Private Limited is the Book Running Lead Manager for the issue,while Bigshare Services Private Limited is the Registrar.

The issue is being made through a 100% Book Building Process wherein up to 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs) on a proportionate basis,subject to valid bids being received on or above the issue price. The Issue has been graded by Brickwork Ratings India Private Limited and has been assigned a grade of 3/5 indicating average fundamentals.

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The funds of the forthcoming issue will be used mainly for entering into technical textile space through investment in wholly owned subsidiaries viz.,Jindal Medicot Limited (JML) and Jindal Specialty Textiles Limited (JSTL). JML is setting up facilities to manufacture Medical Textile Products like Absorbent Bleached cotton Wool & its products and Cotton Crepe Bandage like Stretch Bandage,Crepe Bandage Cloth mainly catering to healthcare and cosmetic sector. The total capacity of the plant will be 5000 TPA. JSTL is setting up facilities to manufacture PVC Laminated products for various applications like Frontlit Banner Fabric,Backlit Banner Fabric,Inflatable Fabric for Boats etc,Tent Fabric,Tarpaulin fabric,Truck Siders,mainly catering to outdoor media advertising industry,recreation and army applications with an estimated annual capacity of 60 Million Sq. Meters. Both these facilities will be set up in District Una in the State of Himachal Pradesh. Further,Jindal Cotex is also expanding its capacity by setting up of a new facility for manufacturing cotton yarn,yarn dyeing and garmenting.

Technical textiles are specialized textile products manufactured for industrial usage. The market for technical textiles is expected to touch $14 billion by 2012,though it is less than $8 billion. Technical textiles have the potential to attract investments worth Rs. 5000 crore and generate 3,00,000 additional employment by 2012. The Government of India has also taken number of steps to promote its growth and as per National Textile Policy that priority will be accorded for their growth and development of technical textiles industry.