Sudar Garments Ltd IPO opens Feb 21, 2011

Sudar Garments Limited, engaged in the manufacturing of garments for Mens wear, Womens wear and Kids wear, proposes to enter the capital markets on 21st February 2011 with a public issue of 90,88,000 Equity shares of Rs 10 each through 100% book building process. The Issue closes on 24th February 2011. The Price Band has been fixed at Rs 72 to Rs 77 per equity share of Rs 10 each. The Issue would constitute 49% of the fully diluted post-issue paid up capital of the Company. Ashika Capital Limited is the sole Book Running Lead Manager for the Issue and Link Intime India Pvt Ltd is the Registrar to the Issue. The Crisil has assigned grade 1/5 to the issue.

The Company proposes to utilize a part of the net proceeds of the issue for expansion of the existing apparel manufacturing unit located in Khalapur Taluka of Raigad District near Mumbai. The investment in expansion is estimated at Rs 26.29 crore. The additional working capital requirement of Rs 27.30 crore is on the basis of additional funds required after the implementation of expansion plans of the company. The expansion plans are expected to be completed in the FY 2011-2012.

Sudar Garments Ltd IPO opens Feb 21, 2011

Further, Sudar Garments Ltd intends to have a total of 25 Retail outlets in major cities of South India and towards this, it has earmarked a sum of Rs.2.40 crore .Out of these, the company proposes to open 10 own retail outlets on leased premises and balance 15 retail outlets proposed to be operated on franchisee basis. It has finalized the locations for the proposed own outlets in the Chennai city. All these retail outlets shall operate under its brand name “Glory to Glory” “St. Paul” and “Majesty”.

“The Company’s growth strategy include penetration across different consumer segments and demographics through its brand, increase geographic penetration by spreading the network of exclusive brand outlets, enhance manufacturing capacities, target the growing segments, strengthen the competitive position and recognition of its brands,” says Mr Murugan Thevar, Chairman and Managing Director of the Company.

“We believe that an increase in manufacturing capacity will help us to enhance economies of scale, and this would eventually translate to an improvement in the price competitiveness of our apparels,” he added. The Company intends to increase its share in the retail market and penetrate overseas markets. Sudar Garments believes that the branding exercise will enhance value in the minds of customers and will help in increasing demand for its products. The brand building exercise is a part of that initiative for which it has earmarked Rs. 3.50 crore.

Sudar Garments is planning to develop in-house capabilities for its marketing activities. “Currently, majority of our products are exported to countries such as United States of America, United Kingdom, and Middle East etc through Merchant Exporters or sold domestically through our selling agents. However, going forward, our plan is to penetrate the retail market thru own outlets & franchisee in domestic market and direct exports to countries such as United States of America, United Kingdom, and Middle East,” emphasized Mr Thevar.

The total income of the Sudar Garments Ltd has increased from Rs 20.90 crore in 2008-09 to Rs 53.97 crore in 2009-10 and the profit after tax (PAT) during the same period was up from Rs 0.59 crore to Rs 4.11 crore. For the first half of the current fiscal period ended 30th September 2010 the Company has achieved total income of Rs 52.60 crore and PAT of Rs 4.08 crore, which is almost equivalent to the whole of Previous Year.

About Sudar Garments Ltd:

The promoter, Mr. Murugan M Thevar has been associated with the apparel manufacturing business since 1992 and today the Company has installed capacity of 20 Lacs Pieces of garments and proposes further expansion. The company is presently manufacturing under its own brand name “Glory to Glory” and will be launching two more brands namely ‘St. Paul’ and ‘Majesty’ along with setting up of retail outlets and also brand building exercise.