The company has filed for the initial public offering (IPO) of equity shares with India's capital market regulator to raise up to $42.4 million (INR 2.2 billion). Tara said it would raise INR 1.5 billion through a new round of equity shares, while major shareholder Fabrikant H.K. Trading Ltd. is selling a portion of its stake in the company valued at INR 700 million. Tara didn't provide the number of equity shares to be sold through the IPO or the price band for the issue.
In addition, Tara said it is considering raising INR 500 million through a private placement of up to 1.8 million equity shares before the IPO. If the pre-IPO placement is completed, the company will reduce the number of equity shares from the fresh issue.
Tara’s operations include manufacturing, exporting and retailing jewelry. Its products include gold, platinum and silver jewelry with or without studded precious and semi-precious stones. The company has four manufacturing units, of which one is located in Panyu, China and the other three in Mumbai.
The company, which retails under the Tara Jewellers brand, said that it plans to use the proceeds to set up stores and repay loans of INR 300 million from the State Bank of India and INR 200 million from ICICI Bank Ltd.
Tara launched its retail operations in October 2008 and plans to invest INR 663 million to expand its presence from suburban areas in the metro cities to mini-metros and other centers which possess a high concentration of mid-income earners.
The company operated 29 stores as of November 30, 2011 and aims to open 20 new stores across India by the end of 2012. It is also looking at joint venture opportunities to tie-up with designer boutiques to foray into high-end retail jewelry segment.
The company posted a net profit of $7.9 million (INR 408.31 million) on sales of $220 million (INR 11.41 billion) in the fiscal year that ended on March 31, 2011. Exports accounted for a major part of its sales with its main markets being the U.S., Australia, China, Canada, European Union, South Africa, the United Arab Emirates and the U.K. The company supplies studded jewelry to chains including Christ Uhrean & Schmuck and retailer Walmart.
Tara added that it is looking to enter select new markets such as South and Central America and plans to set up a manufacturing facility at Honduras.
The company has proposed to list its equity shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The book-running lead managers for the issue are Enam Securities Private Ltd. and ICICI Securities Ltd. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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