Tuesday, March 07, 2006

MALU PAPER MILLS LTD-IPO

Issue Opens: 06 March, 2006
Issue Closes: 10 March, 2006
Issue Size : 6,667,000(No. of Shares)

Lower Price Band : Rs.30

Application Multiple: 200 and in multiples there off starting with atleast 200 shares
Maximum Shares: 3200 for retail investors

Information URL : http://www.malupaper.com
Prospectus URL : http://www.sebi.gov.in/dp/malupaperfinal.pdf

About the Company:

Malu Paper Mills Limited, a Nagpur based company is involved in the manufacture of Kraft Paper and Newsprint. Its plant near Nagpur is at the heart of India and thus enjoys a location advantage with respect to servicing clients. The company wants to increase revenues and bottom line by adding additional capacity of Newsprint and reducing costs in existing operations.

Objects of the Issue

For manufacturing newsprint, the company uses recycled paper as raw material and uses the de-inking process.It has decided to go in for a new paper machine line of 150 TPD Capacity capable of manufacturing premium quality newsprint.It has already placed an order for a Deinking plant from Andritz of Finland. Also They are setting up a captive power plant to help reduce production cost.
The total cost of this expansion is Rs. 70 Crores and the project has already appraised by the lending bankers and have sanctioned a term loan of 50.00 Crores.

Competitive Strengths
· Current market share of 3%, poised to grow to 10% after completion of current expansion
· Diversified clientele of large publishing houses and newspapers
· Location of plant in central India gives logistical advantage


Consolidated Financials
(Rs. In Lacs)
2004 A : 2005 A
Total Income 4540 : 4825
PAT 72 : 265
EPS (Rs.) 1.03 : 3.79
PE at price of Rs. 30 is 8
RONW(%) 9.19 : 22.01

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