Jindal Poly Films forthcoming public issue to fund expansion plans

01-Jun-05

Jindal Poly Films Ltd, part of the Rs 1500-crore B C Jindal group manufacturing flexible packaging films, is coming out with a follow-on public issue aggregating up to Rs 300 crore to fund its expansion plans. The issue opens on June 9 and closes on June 15. Jindal Poly Films Ltd., manufacturer BOPET films (polyester films) and BOPP films (polypropylene films), is undertaking an expansion exercise and is focusing on being an integrated packaging films manufacturer. The company has included installation of additional coating and metallising lines in its expansion program for producing high value added products. It also plans to commence production of coated films at its plant situated in Nasik, which is also the largest single-location unit in India for the manufacture of flexible packaging films. In November 2003, Jindal took over Rexor - a specialist in coating and metallising technologies. Jindal plans to use these technologies for its Indian expansion, encompassing coating and metalising, polyester films and BOPP films. The total expansion will require investment to the tune of Rs 650 crore. Rs 300 crore will come from a public issue and the balance from loans and internal accruals of the company. New equity shares will be issued to the public, including the FIIs, mutual funds and the public at large, indicating a dilution of the promoters' current holding of approx 78%. The number of shares is not fixed, but depending on the price, it could be in the range of 57-60%. The company's first phase expansion is expected to be complete by December, while its second phase is scheduled to be taken up in 2006. Recently, DEG, one of Europe's largest development finance institutions, invested in Jindal Poly Films and it now holds close to 9.5% of its equity capital.. Jindal Poly Films diversified into BOPET film production in 1996 after being a producer of only yarn since 1985. In 2003, it commenced production of BOPP films and metallised films. It now plans to commence production of coated films also.