Mumbai, (IndiaPRwire) Neel Metal Products Limited (the “Company”), a JBM Group company and integrated steel processing and automotive products manufacturer, has filed its Draft Red Herring Prospectus (“DRHP”) with the Securities & Exchange Board of India (“SEBI”) to enter the capital market with its initial public offering (“IPO”) of equity shares.
The Company proposes to issue 5,251,000 equity shares of Rs. 10 each (“Equity Shares”) for cash, at a price to be decided through a 100% book building process (“Issue”). The Equity Shares of the Company, offered through this IPO, are proposed to be listed on the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”).
The Issue comprises a Net Issue of 4,988,450 equity shares (“Net Issue”) and a reservation of up to 262,550 equity shares for eligible employees (the “Employee Reservation Portion”). The Issue will constitute 35% of the fully diluted post-issue paid-up equity share capital of the company. The Net Issue will constitute 33.25% of the fully diluted post-issue equity share capital of the company.
Of the total equity float, up to 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (including 5% of the QIB portion that would be specifically reserved for Mutual Funds for allocation on a proportionate basis). Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.
The Book Running Lead Manager (“BRLM”) to the Issue is ICICI Securities Limited.
Neel Metal Products Ltd. is a part of the JBM group of companies, which is a prominent player in the automotive components manufacturing industry in India. The Company’s integrated facilities enable it to manufacture a wide spectrum of automotive components, ranging from production of steel blanks, steel tubes for two-wheelers, frames for scooters, wheel rims, stamped components and complete fabricated and painted body for three-wheelers. Additionally, the Company designs and manufactures customized equipment such as jigs, fixtures and special purpose welding machines, required for weld-assembly of vehicles, which the Company supplies to original equipment manufacturers (“OEMs”) as well as OEM vendors.
The Company’s manufacturing facilities are located at Gurgaon, Haridwar and Faridabad in northern India, each of which is in close proximity to the facilities of the Company’s major customers. The facility at Gurgaon contains the SSC, tubing, tools manufacturing and component manufacturing facilities, and has an installed capacity of 170,481.0 MT as of March 31, 2007. The Company manufactures the complete welded and painted body for three-wheelers, for M&M from the facility at Haridwar. It had an installed capacity of 60,000 nos. as of March 31, 2007. The Company also manufactures steel tubes for the automotive industry through its joint venture at Faridabad and as of March 31, 2007, it had an installed capacity of 36,000.0 MT.
The Company has a technical collaboration with Metal One Corporation, Japan (“Metal One”), in relation to the Company’s SSC at Gurgaon; and with Union Autoparts Manufacturing Company Limited, Thailand, (“Union Autoparts”), in relation to the manufacture of wheel rims at the Company’s facility at Gurgaon. The Company has also entered into an agreement with JFE Steel Corporation, Japan (“JFE Steel”) for technical collaboration and systems support.
The Company has entered into joint ventures with certain foreign players, including Arcelor Tailored Blank Lorraine, an Arcelor-Mittal group company, (“Arcelor”), pursuant to which the Company will receive technological and systems support for the production of tailor welded blanks at the Company’s facility at Gurgaon through its joint venture company Arcelor Neel Tailored Blank Private Limited (“ANTB”); Thai Summit Autoparts Industry Company Limited, Thailand (“Thai Summit”), for supplying automotive components for two-wheelers in India through its joint venture company Thai Summit Neel Auto Private Limited (“TSNA”); Fanalca S.A., Columbia (“Fanalca”) for providing waste management services through its joint venture company Neel Metal Fanalca Environment Management Private Limited (“Neel Metal Fanalca”); and Nisshin Steel Company Limited and Sumitomo Corporation, Japan (“Nisshin” and “Sumitomo”, respectively), pursuant to which the Company will receive technological and systems support for the manufacture of steel tubes at the facility at Faridabad. Subsequent to this, the Company has recently hived off the facility at Faridabad to its joint venture company ANSTPL, in which the Company intends to retain a controlling interest.
