Veto Switchgears and Cables IPO opens on December 3, 2012

Veto Switchgears and Cables Limited, a company engaged in the manufacture and sale of wires & cables and electrical accessories, is proposing a Public Issue of its Equity Shares of face value of Rs.10/- each for cash at a price to be decided by Book Building Method aggregating up to 2,500 lacs (the "Issue"). The Price Band is fixed at Rs.48/- to Rs.50/-.

The Company intends to utilize the Issue Proceeds to finance proposed modernization of existing facility at Hardwar, Uttarkhand, to meet incremental long-term working capital requirements and achieve the benefits of listing on the Stock Exchange which will enhance the Corporate Image and Brand Name.

The Equity Shares are proposed to be listed on the SME Platform of National Stock Exchange of India Limited - "EMERGE".

The Book Running Lead Manager to the Issue is "Keynote Corporate Services Limited" while the Co-Book Running Lead Manager is "Indian Overseas Bank" and the Registrar to the Issue is "Bigshare Services Private Limited". While the Market Maker is Keynote Capitals Limited, the Syndicate Members include "Keynote Capitals", "Prabhudas Lilladher", "Hem Securities" and "Ladderup Corporate Advisory".

Veto Switchgears and Cables Limited is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India. The product portfolio ranges from industrial cables, strand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps and other electrical accessories. The products are manufactured at its state-of-art manufacturing unit located in Hardwar, Uttarakhand. They supply their products under the brands "VETO" and "VIMAL POWER" through their large network of nearly 2,400 dealers to their customers. The central warehousing facility is located at Jaipur, Rajasthan.

The Company was incorporated as a private limited company on June 20, 2007 by conversion of partnership firm M/s Veto Industries" under part IX of Companies Act, 1956. They are part of Jaipur, Rajasthan based Gurnani Group which has interests in wires & cables, electrical accessories, real estate and hotels.

The products are being manufactured and assembled at this facility. The existing installed capacity of the facility for wires & cables is 1,408,000 bundles p.a. and for electrical accessories is 38,000,000 pieces p.a. The unit qualifies for deduction under section 80-IC @ 100% for the initial 5 Assessment Years from AY 2008-09 and 30% for subsequent 5 Assessment Years from AY 2013-14.

Over the years, Veto has strengthened their manufacturing capacity by undertaking expansion from time-to-time. Most of their products are used in households, offices, factories, etc i.e., B2C (Business to Consumer) and sold over the counter by their network of dealers. The demand for their products has surged due to the growing demand for new homes and offices in India. This is further supported by the growth in various industries across. Thus, in order to improve their market share, they need to increase their presence and market their products in new locations. Further, the demand for their products from the overseas markets has been positive and thus they propose to capitalize the same by increasing their existing capacities.

The standalone total income of the Company increased to Rs. 6,860.28 lacs in the fiscal year 2012 from Rs.2,497.69 lacs in the fiscal year 2008 at a 5 year CAGR of 28.74%. During the same period, the net profit after tax increased to Rs.722.41 lacs from Rs.213.23 lacs at a 5 year CAGR of 35.67%.

Source : Equity Bulls

Keywords