Agro-processing original equipment manufacturer Sona Machinery is set to launch its IPO next week. The IPO, which will be listed on NSE Emerge, will open for subscription on March 5 and close on March 7. The price band of the IPO is ₹136–₹143 per equity share.
The company, which is into technology equipment for complete rice mill project set-ups as well as manufacturing equipment for cleaning and processing various grains like pulses, wheat, sesame, millet, corn, seeds, and so on. It is looking at a fresh issue of 36.24 lakh equity shares with a face value of ₹10 per share.
Vasu Naren, Chairman and Managing Director, Sona Machinery, told CNBC-TV18, “With the growth in demand for processed grains, many of our old customers are expanding their operations and looking for larger capacity to meet this demand.” So, the company is hoping the listing will help fuel its expansion.
Over 55% of the net proceeds will be used for capital expenditures involved in setting up a new manufacturing unit in Ghaziabad, with 4% for the repayment of outstanding lines of credit availed to purchase machinery, and the remaining will be used for general corporate purposes. The company will invest close to ₹29 crore to set up a new unit in Ghaziabad.
Vasu Naren is optimistic that after listing, the company will be able to attract more clients and commission larger projects. “With the capacity expansion in our production capacity, we would be able to fulfill this demand.”
Naren added, “The
food processing industry has been witnessing continued growth and with a policy focus and push from the Union Government, it has led to growth in the food processing industry, especially for grains. This has led to an ever-rising demand from customers for our products and we anticipate that the increase in demand will continue for the coming years.”
Over 95% of its business comes from domestic sales, but it's looking at growing its international presence. At present, it exports to Nigeria,
Bangladesh, Kenya, Nepal and others.
Hem Securities Limited is the sole book-running lead manager for the proposed offering, while Maashitla Securities is the registrar for the issue.
(Edited by : Keshav Singh Chundawat)
