UIC Udyog Plans Public Offer

UIC Udyog is planning to tap the primary markets with an Initial Public Offering (IPO) to raise funds upto Rs 108 crore. The face value of the equity shares is Rs 10. As yet, the company has not declared the number of equity shares under this issue.

UIC is one of the leading manufacturers of steel wire and wire products in India. The company's existing facilities for steel are located at Kalyani, West Bengal (installed capacity of 60,000 MTPA) and Khanyan, West Bengal (installed capacity of 25,000 MTPA). It also manufactures steel pins at Khanyan. UIC has installed wind power generation turbines of 5 MW capacity each in Maharashtra and Tamil Nadu. In addition, it has some exposure in woven sacks, with a manufacturing facility at Silvassa.

The company has a good client base, including NTPC, NHPC, PGCIL, Damodar Valley Corporation, L&T, Kalpataru Power Transmission, KEC International, Jyoti Structures, IVRCL Infrastructures & Projects, CESC, the Ministry of Water Resources, Ministry of Railways, Directorate General of Supplies & Disposals, various State Electricity Boards, etc. Its steel products' portfolio includes pre-stressed concrete wire, earth wire, ACSR wire, cable armour wire, galvanised wire, barbed wire, etc. and it caters to various industries like power, engineering, agriculture, railways, defence, etc.

UIC intends to use the proceeds of the issue to set up a greenfield manufacturing facility with an installed capacity of 1,80,000 MTPA, including galvanising capacity of 1,00,000 MTPA, at Bharuch, Gujarat. The total capital required for this plant is almost Rs 508 crore, which is considerable higher than the expected IPO proceeds. The company confirms that firm arrangements of finance towards the remaining contribution for the proposed capex, excluding the amount to be raised through the proposed issue, have been made through verifiable means. However, we will wait to comment on this issue till the company offers further clarification in terms of number of equity shares offered and price band.