Tolins Tyres Shares Close At Nearly 6% Premium Over Issue Price

Shares of Tolins Tyres Ltd. closed at a premium of 5.9% on the National Stock Exchange on Monday at Rs 239.4 as compared to the issue price of Rs 226 apiece. The stock closed at Rs 238.3 apiece on the BSE, marking a premium of 5.4%.

The scrip debuted on the NSE at a premium of 0.9% and on the BSE at a premium of 0.45% in the morning.

The initial public offering was subscribed 23.89 times on the third and final day. The offer consists of a fresh issue of equity shares worth Rs 200 crore and an offer for sale worth Rs 30 crore.

"The main utilisation of Rs 200 crore is to make the parent company and subsidiary debt free to the extent of about Rs 85 crore," said Managing Director R Sanakarakrishnan, in conversation with NDTV Profit.

"Another Rs 75 crore is being augmented for additional working capital requirements of the company, based on estimated targeted growth for the company in the ensuing years," he added.

The company manufactures tyres for vehicles, including light commercial, agricultural and two- and three-wheeler vehicles and precured tread rubber. It also produces ancillary products like link bonding gum, vulcanising solution, tyre flaps and tubes.

The company plans to use Rs 69.9 crore from the proceeds of the IPO for repayment of borrowings, Rs 75 crore as working capital requirement, Rs 15.1 crore for the repayment of loans of its Indian subsidiary and Rs 8 crore for working capital of its Indian subsidiary.

Tolins is operating at an average capacity utilisation of around 33.4%. It intends to increase the production capacity progressively in the next few years to go up to 75% capacity utilisation under various product portfolios.