KIRI DYES AND CHEMICALS Ltd. (KDCL) :- Raising around Rs 50 Cr
Issue opens on 25/03/2008 Issue closes on 02/04/2008 Website :- www.kiridyes.com
Price Band Rs. 125-150/- Minimum Bid Quantity 45 shares Face Value Rs. 10/-
Background:-
Usage of the money from issue proceeds :-
Strengths of the company:-
Valuations of the company :-
· Sales increased at a CAGR of 10% to Rs. 134 crore in FY 07 from Rs. 91 crore in FY 03.
· Net profit increased at a CAGR of 20.75% from Rs.4.06 crore in FY 03 to Rs. 8.63 crore in FY 07. PAT for half year ended September June 2007 was Rs. 8.9 crore.
· NPM has increased from 4.5% in FY 03 to 6.5% in FY 07. For half year ended September 2007, NPM was 9.2%.
· The RONW has increased from 16% in FY 04 to 25.5% in FY 07 because of increase in PAT.
· Debtors’ turnover ratio for FY 07 stood at 4.5 times as compared to 10 times in FY 06.
· Book value per share decreased from Rs. 108 in FY 03 to Rs. 36 in FY 07 mainly due to increase in the issue of equity capital over the period. BV per share as on 30 September, 2007 was Rs. 44.
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·Kiri Dyes & Chemicals Ltd. (KDCL) was incorporated as a private limited co. in May 1998 and was converted into a public ltd co. in May 2006.
·KDCL is engaged in the business of manufacturing and marketing of: a) Reactive Dyes- Synthetic Organic Dyes (S.O. Dyes) b) Dye Intermediates- Vinyl Sulphone and H-Acid
·KDCL’s production hub is centrally located in Gujarat. S.O. Dyes are manufactured and processed in three plants located in Vatva, Ahmedabad and dye intermediates are being produced at Padra plant in Vadodara.
·The installed capacity for dyestuff (S.O. Dyes) was 10,800 MT per annum with capacity utilization of 77.37% in FY 07.
·The installed capacity for dye intermediates (Vinyl Sulphone and H-Acid) was 3,600 MT per annum each with capacity utilization of 42.94% and 4.17% respectively in FY 07.
·KDCL’s product range comprises of more than 120 dyestuffs used by textiles, leather, paint and printing-ink industries.
·KDCL supplies reactive, acid, and direct dyes as well as dye-intermediates in various forms like standardized spray dried/tray dried - powder/granular, crude and reverse osmosis.
·KDCL has seen increase in the % share of the domestic market from 0.80% in FY 03 to 33.55% in FY 07. For half year ended September 2007, the same has increased nearly to 49%.
·KDCL’s major chunk of export revenue comes from Turkey (18%) and Korea (18%) followed by Bangladesh (17%), USA (15%),Taiwan (7%) and Indonesia (6%).
·Some of KDCL’s top customers includes both Indian and global companies such as, Dystar (India) Pvt ltd (India), Kyungin Synthetic Corporation (Korea), Sen Er Boya Kimya (Turkey), Biddle Sawyer Corporation (USA), Befuwell Enterprise Co Ltd (Taiwan) and Shangyu Yide Chemical Co. Ltd (China).
·On November 1, 2007, KDCL entered into the Memorandum of Understanding with M/s. Zhejiang Lonsen Group Stock Co. Ltd. with the objective to establish a joint venture manufacturing facility in India for the production of reactive dyes.
·Post issue promoter and promoter group shareholding will reduce from 89% to 67%.
· To fund the capital expenditure.
· To fund the capital expenditure for Dyes and Intermediates Unit located at GIDC, Vatva, and Ahmedabad.
· To fund the additional working capital margin.
·To invest in general corporate purposes.
·OPM has increased from 8% in FY 06 to 10.7% in FY 07. For half year ended September 2007, OPM stands at 15%.
·KDCL’s source of revenue is well diversified. Therefore, the company’s revenue will mainly remain unaffected if any of the markets slow down.
·During five years from FY 03 to FY 07, company had negative cash flows in three years.
·The debt-equity ratio of the company increased from 1.10 times in FY 05 to 1.76 times in FY 07 due to increase in the long term debt taken by the company from Rs. 19.64 crore in FY 05 to Rs. 59.67 crore in FY 07.
