Aryan Finefab

IN THE CAPITAL MARKET Aryan Finefab ARYAN FINEFAB, a 100 per cent export- oriented unit, is entering the capital market with a public issue of 18,00,000 equity shares of Rs 10 each for cash at par, The issue, which will open on November 6, is for partly financing the cost of the company's grey cotton fabric plant. The plant is located at Kadi in Mehsana district in Gujarat. Commercial production is expected to begin by the end of this month. Grey cotton fabric is a product in great demand in international markets, especially in UK, USA and West Germany. The falling rupee value is making indian cloth cheaper for foreign buyers. Reflecting this, Indian exports in this field rose by as much as 38 per cent East year and the trend is expected to continue. India's exports last year of grey cotton fabrics manufactured on powerlooms were worth Rs 349 crore. Export of grey cotton fabrics in the first four months of the current year was over Rs 375 crore, way ahead of all expectations. The entire production capacity of the plant has been tied-up. At 90 per cent efficiency the plant will produce 9,264 metres of very high quality fabric daily. The company expects to achieve this capacity soon after starting commercial production. The cost of the project is estimated at Rs 415 lakh. It will be financed to the extent of Rs 300 lakh through equity capital (Rs 120 lakh from promoters and Rs 180 lakh from the public), Rs 90 lakh ICICI line of credit and Rs 25 lakh government subsidy. The first phase of the company's future plans involves the installation of another set of 18 high-speed Sulzer Ruti Airjet looms and a modern process house with processing capacity of 25,000 metres of fabrics of wider width per day. The plant would then become one of the very few process houses able to process wider width fabrics of up to 93 inches. After four years, in the second phase of its growth plans, the company intends to install a modern spinning plant to meet its own captive requirement and to cater to the outside market as well as exports. The first phase of the expansion is expected to be financed by internal accruals. The spinning plant is estimated to cost around Rs 20 crore and is expected to be financed totally by borrowings and internal accruals. Therefore, equity is expected to be maintained at Rs 300 lakh only. Aryan Finefab will thus be a modern, high-tech spinning, weaving and processing unit with a very low capital base ensuring high return on the present equity base.