Investors have shunned the initial public offer (IPO) of Tara Health Foods. The issue was subscribed just 1% by 16:00 IST on the second day of the issue today. The IPO received bids for 98,070 shares compared to 85 lakh shares on offer.
The IPO which opened for bidding on 28 April 2010 closes on 30 April 2010. Ratings firm Fitch has assigned an IPO Grade 2 to IPO, indicating below average fundamentals.
The company on 27 April 2010 raised Rs 27 crore through issue of 15 lakh shares to two anchor investors at Rs 180 per share, at the lower end of the Rs 180 to Rs 190 per share price band. IDFC Premier Equity Fund was allotted 7.5 lakh shares and 7.5 lakh shares were issued to Kotak Mahindra (UK) A/c Sandstone Capital India Master Fund.
Out of the funds to be raised from the IPO, the company plans to spend Rs 125.32 crore to set up a 300-tonne per day (tpd) edible oil refining plant at its existing location of Malerkotla, Punjab. It plans to spend Rs 4.52 crore to expand the existing 250-tpd cattle feed plant and Rs 38.96 crore will be used to augment the long-term working capital requirement.
Tara Health Foods is into cattle/poultry feed, refining and blending of edible oil and solvent extraction. It also makes animal foods and edible oils.
The company posted net profit of Rs 36.29 crore on net sales of Rs 231.10 crore in the nine months ended December 2009.
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