The second largest pencil-maker Doms Industries on Thursday set a Rs 750-790 price band for its Rs 1,200 crore initial share sale that's opening on Dec. 13.
The Umbergaon, Valsad-based company said the issue comprises Rs 850 crore of offer for sale and Rs 350 crore of fresh issue, and will close on Dec. 15. Its chief financial officer Rahul Shah told reporters here that the floor price is 75 times and the cap price is 79 times the face value of the equity shares.
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The OFS will have its single largest shareholder Fila of Italy selling shares worth Rs 800 crore from its 51% holding and promoter families diluting shares worth Rs 50 crore—Rs 25 crore each by Sanjay Mansukhlal Rajani who is a director of the company and Rs 25 crore by Ketan Mansukhlal Rajani who is whole-time director.
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This offer also includes a reservation of shares aggregating up to Rs 5 crore for subscription by eligible employees which will be issued at a discount of Rs 75 per share.
The company will use proceeds to part finance the Rs 453.57 crore capex for setting up a new manufacturing facility to expand production capabilities for a wide range of writing instruments, water colour pens, markers and highlighters, in Umbergaon where it already has multiple units.
Post-issue, Fila (Fabbrica Italiana Lapis ed Affini), which owns 51% and has invested close to Rs 300 crore since 2012, will continue to be the single largest shareholder and together with the Italian partner, the promoters will hold 75% equity.
Santosh Raveshia owns 17% of the company, Sanjay Rajani and Ketan Rajani own 8.63% each; and Chandni Vijay Somaiya, Sejal Santosh Raveshia and Sheetal Hiren Parpani hold 4% each.
Interestingly, the coastal town Umbergaon in the Valsad district of Gujarat is known as the pencil town of the country as it is home to the two largest players—Hindustan Pencils, which controls around 40% of the market, and Doms controlling 30%.
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