Thursday, September 24, 2009

jindal cotex ipo

jindal cotex ipo

Jindal Cotex Limited (JCL) is a flagship company of Jindal group of Ludhiana. Ludhiana is an industrial hub of Punjab which is also known as Manchester of India. The Jindal Group was promoted by Sh. Jagdish Rai Jindal in 1977 with trading business of iron and steel. From the time of its inception, Jindal Group has seen substantial growth.

Jindal Cotex manufactures Acrylic, Polyester, Polyester – Viscose, Polyester Cotton, combed and carded yarn, which are used to manufacture suitings and fabrics. They have an installed capacity of 23,472 spindles of acrylic, cotton blended and polyester yarns.

In addition to the existing business, the IPO is meant to raise money for expansion and entry into new lines of business. These new lines of businesses are medical and specialty textiles, and will be carried out through fully owned subsidiaries.
Jindal Cotex has also installed a 1250 KW Suzlon Wind Mill, and plans to sell all the power generated from this wind mill to Ajmer Vidyut Vitran Nigam (AVVN). AVVN is a power distributor that supplies power to 11 districts in Rajasthan. So, Jindal Cotex seems to be testing waters in the power generation business as well.

jindal cotex ipo is set to offer between August 27th and September 1, 2009.

The price band of jindal cotex ipo has been fixed between Rs. 70 and Rs.77.

risks in jindal cotex

Jindal Cotex, its directors and group companies face various court cases against them, which if decided against them will have adverse impact on the business.

The top 3 customers of the company contributed about 52% of sales for the year ended March 31st 2009. This means that the company depends on a few big customers for the majority of its revenues. The same is the case for suppliers also, because the company depends on 3 suppliers to supply 52% of their purchases.

The company had taken a short term loan of Rs.500 lacs from Punjab and Sind Bank, which was due for repayment on May 14, 2009. Jindal Cotex requested the bank to roll over the loan, and it is now due on November 14, 2009.

future of jindal cotex

Jindal Cotex Limited is now expanding the spinning capacity by building state of art cotton spinning unit bringing machines from the world leaders of textile machine manufacturing companies. The unit will be operational by the last quarter of 2008 with 28800 spindles in the first phase. In second phase the capacity will be enhanced to 50000 spindles. The unit would have the dyeing unit and in-house power generation plant. The new unit is to offer count 16 to 60 Ne cotton yarn from conventional cotton quality as well as organic cotton quality. Ultra modern and sophisticated testing equipments are being installed in order to control and offer superb quality yarn.

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