Raj Oil Mills to list on 12 August 2009

The IPO was priced at Rs 120 per share

Shares of Mumbai-based Raj Oil Mills will debut on the secondary stock markets on Wednesday, 12 August 2009. The shares will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The company had priced its initial public offer at the top end of the Rs 100-Rs 120 price band. The issue price of Rs 120 discounts the company's year ended December 2008 earnings per share (EPS) of Rs 8.2, with a price earning (PE) multiple of 14.63.

The IPO had closed for on 23 July 2009, with a total subscription of 1.24 times. The company received bids for 1.17 crore shares compared with 95 lakh shares on offer. The issue constituted 26.38% of the fully diluted post-issue paid-up capital of the company.

Raj Oil Mills is a branded player in the edible oil business. It is engaged in processing and marketing of vegetable oils. The company plans to use issue proceeds to set up various facilities at Manor, Thane district, Maharashtra. These include a refinery of 200 tonnes per day (tpd), which can process Sunflower, Soyabean, Groundnut, Palm, Cotton Seed oils; a crushing unit of 200 tpd for Groundnut and Copra; a Palm Fractionation unit of 100 tpd; and a Vanaspati Ghee unit of 50 tpd, an Ayurvedic and Cosmetic unit of 5 tpd and an in-house blow moulding plant for PET Bottles.

The funds of the IPO will also fund setting up of crushing unit of 200 tpd for sesame and mustard at Bagru, Jaipur district, Rajasthan; for brand promotion, expansion of marketing & distribution network and for setting up of research and development facilities. The margin money for working capital requirement and issue expenses will also be met out of issue proceeds.

The company reported a net profit of Rs 29.62 crore on sales of Rs 317.76 crore in the year ended December 2008.