ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Mehta Integrated Finance

Timex Watches TIMEX WATCHES, another Tata group venture in watch manufacturing and a joint venture between Titan Watches and Timex Witches BV of the US, is coming into the market on August 17 with an issue of 40 lakh 12.5 per cent partly convertible debentures of Rs 140 each at par and offering conversion of part A of Rs 40 into four equity shares of Rs 10 each on allotment and part Bof Rs 100 for redemption after seven years. Timex Watches BV is the largest watch selling company in America while Titan Witches commands in this country a 60 per cent market share in quartz analog watches. From the original proposal of assembling watches and manufacturing plastic and metal watch parts, the joint venture company Timex Watches in India has enlarged its scope of manufacture to cover straps, dials, keepers and case backs, while its project cost, originally appraised by the 1CICI in 1989 as Rs 47.60 crore, has gone up to Rs 82.50 crore. It is setting up a plant at Noida in Uttar Pradesh to manufacture 2.5 million quartz watches per year. This is being covered with Rs 40 crore equity, Rs 40 crore of the non-convertible portion of the debentures issue; and Rs 2.50 crore of institutional loans. Titan Watches and Timex Witches BV are to have a 28.75 stake each in the company. Production of original phase I proposal commenced in October 1992 and of the subsequent phase II it is to start in March 1994. During 1992-93, the company made sales of Rs 15.87 crore and carried a loss of Rs 5.02 crore. Crisil has given the debentures issue a BBB + rating covering moderate safety of payment of interest and the principal amount for the present. The company is to cater to the lower price segment of the market covering watches costing less than Rs 700. It is to be using Titan Watches marketing network for selling its watches. Sales are projected for 1993-94 at Rs 50 crore, for 1994-95 at Rs 77 crore and for 1995-96 at Rs 92 crore, with net profit estimated respectively at Rs 3.57 crore, Rs 12 crore and Rs 19 crore and EPS at Re 0.89, Rs 2.97 and Rs 4.48. ICICI Securities, DSP Financial and ANZ Grindlays are the lead managers of the capital issue.

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