Indo Rama Synthetics (India)

Indo Rama Synthetics (India) INCORPORATED in 1986, Indo Rama Synthetics (India) is promoted by the Lohia's of the Indo Rama group, engaged in spun yarn, polyester fibre and polyester filament yarn, petro chemicals and steel plants. The company went public in June 1989 and over the last four years has achieved an average annual growth rate of 100 per cent in sales, 105 per cent in profits and 62 per cent in production. The company is a government-recognised export house and is a recipient of the Synthetic and Rayon Textiles Promotion Council Export Awards for 1989-90 and 1990-91. In 1992-93 the company exported 54 per cent of its total turnover of Rs 129 Crore. The company started with an initial capacity of 21,120 spindles and increased it to 58,992 spindles. The company now proposes to further increase its capacity to 140,160 spindles by setting up additional 21,984 spindles at Pithampur and 59,184 spindles at Butibori, Nagpur, out of which 3,456 spindles at Nagpur will start operations next month and installation of the balance will be completed in a phased manner by October 1994. The company is also undertaking a backward integration project to manufacture 38,000 tonnes per annum of polyester-oriented yarn and polyester staple fibre (PSF) at Butibori in collaboration with E I Du Pont De Nemours of USA (for polycondensation unit) and with Toyobo of Japan (for PSF). This is the first time Japanese PSF technology is being brought to India. The Rs 555 crore project is to be financed through a Rs 267.26 crore rights issue of zero interest fully convertible debentures, Rs 9.25 crore from NRls (already raised), term loans of Rs 270.78 crore, state subsidy of Rs 30 lakh and internal accruals. Term loans include foreign currency loans of $ 35 million from international Finance Corporation, Washington, DM 15 million from DEC Germany, DM 41.19 million from 1KB Germany and a foreign currency loan of $10 million and rupee loan of Rs 20 crore from Industrial Finance Corporation of India (IFCI). IFC, Washington , and IFCI have agreed to subscribe to $ 10 million and Rs 15 crore of fully convertible debentures, respectively. Part A of Rs 60 of the FCD face value of Rs 240 will be converted into one equity share at a premium of Rs 50 on the expiry of six months from the date of allotment while part B of Rs 180 will be converted in the 18th month at a price which will be 75 per cent of the average market price in the 15th, 16th and 17th month from the date of allotment. The projections made by IFCI (the project appraiser) forecast sales of Rs 137.5 crore, Rs 195.5 crore and Rs 497.7 crore for profit of Rs 16.4 crore, Rs 23.7 crore and