Birla Cotsyn (India) Ltd. IPO Analysis

June 30, 2008

Keynote Capitals set “Subscribe with a long term view” recommendation on Birla Cotsyn (India) Ltd. IPO, which opens for subscription on June 30 and closes on July 4.

Birla Cotsyn (India) Ltd. IPO details:

Price Band: Rs. 15 - 18 per share
Issue open between: June 30 - July 4, 2008
Book Running Lead Managers: Allbank Finance, Nexgen, Saffron, Chartered Capital
To List on: NSE and BSE
Market Cap post-listing: Rs. 169 Cr or $39 million (based on the cap price)

Synopsis

- Birla Cotsyn (India) Ltd. (BCIL), a Yash Birla Group company, is engaged in textile manufacturing.

- Primarily a cotton ginning and trading company, it scaled up operations via inorganic route, by acquiring assets of Khamgaon Syntex Ltd in August 2006 for foraying into synthetic yarn. It also entered into a 50:50 JV with Bhardwaj Group in December 2006.

- The acquisition and JV led to a growth in topline and bottomline from Rs3.8Cr to Rs53.5Cr and Rs0.3Cr to 2.6Cr respectively in FY07. EBITDA margins, however, declined from 8.9% in FY06 to 6.0% in 9 months to Dec 07.

- It plans to become fully integrated with presence across spinning, weaving, processing and garmenting and will also foray into retailing by opening outlets under its own brand.

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Posted in IPO