Date:18/01/2006 URL: http://www.thehindubusinessline.com/2006/01/18/stories/2006011801930300.htm

Back Malu Paper likely to tap market for Rs 20 crore

Badal Sanyal

MPML has two operational units at Nagpur with kraft paper and newsprint manufacturing capacities of 8,250 tonnes and 19,800 tonnes per annum, respectively. The company is a joint venture of first generation entrepreneurs and all the promoters belong to the Malu family.

Kolkata , Jan. 17

MALU Paper Mills Ltd (MPML), a closely-held company of the Nagpur-based Malu family, has plans to make an initial public offering to raise about Rs 20 crore from the capital market.

The amount to be raised will meet a part of the cost of a new unit being set up in Nagpur to produce about 150 tonnes of newsprint/writing printing paper per day and a 6 MW captive co-generation power plant.

The total cost of the new unit will be about Rs 70 crore comprising the maiden public issue of Rs 20 crore, term loans from banks and FIs for about Rs 45 crore and the promoters' contribution of around Rs 5 crore.

Although the proposed IPO is yet to get SEBI approval, the company has received in-principle approvals from BSE and NSE.

MPML has two operational units at Nagpur with kraft paper and newsprint manufacturing capacities of 8,250 tonnes and 19,800 tonnes per annum, respectively.

The company is a joint venture of first generation entrepreneurs and all the promoters belong to the Malu family.

The company was initially incorporated in 1994 as Malu Solvex Ltd, but the name was subsequently changed to MPML.

The company's CFO & Compliance Officer, Mr Girish Malpani, told over the telephone that MPML was a medium paper-cum-newsprint manufacturing company.

It has to compete with big players in the field who have better economies of scale with higher capacity.

Armed with the new capacity addition, the company would be able to enjoy at about eight per cent share of the domestic newsprint market, he felt.

MPML posted a revenue of about Rs 49 crore in 2004-05 and a net profit of about Rs 2.64 crore as against a lower profit of about Rs 71 lakh on sales revenue of about Rs 47 crore in 2003-04.

Since the start of 2001, the company's net profit grew from Rs 12 lakh to about Rs 2.64 crore in 2004-05 but the growth had been very erratic with the company making losses in one of the last five years, said Mr Malpani.