Flexituff International IPO Review by Magnum Broking (Apply)

Isssue Open: Sept 29, 2011 - Oct 05, 2011
Issue Type: 100% Book Building
Issue Size: 98-104 cr
Market Lot: 40 Shares
Rating Agency: CARE

• The company currently manufactures FIBC, Geo-Textile Fabric and Ground Cover, Reverse Printed BOPP Woven Bags, Special PP Bags including Leno Bags. These products are manufactured at our three manufacturing units located in Pithampur (M.P.) and Kashipur (Uttrakhand).
• The company has a recycling and reprocessing plant at Kandla which is used for recovering polypropylene and making various compounds of plastics. Our step down subsidiary, Lakshmi Incorporated, U.S.A manufactures reclosable extruded zipper profile which is used as a secondary closure for 5-50 kg bags.
• They also have a Research and Development centre at Kashipur which is engaged in the research and development of various compounds for plastic products including engineering plastic, bio-degradable plastic and other new product developments.
• They are a major exporter of FIBC and woven products from India and have been receiving the Top Exporter Award from the PLEXCONCIL, Ministry of Commerce from 2005-06 to 2008-09 every year.
•  The company exports to around 30 countries across the globe & are present in 4 continents with major thrust of exports being to U.S.A and Europe.

OBJECTS OF THE ISSUE

• Expansion of manufacturing facilities at SEZ and DTA units at Pithampur;
• Setting up of Dripper Project at Kashipur;
• Working capital requirements;
• General Corporate Purposes;
• To meet Issue expenses.

Concern

• Reduction or termination of tax incentives and benefits to units in Special Economic Zone (SEZ)
• Major revenue from exports to US and Europe
• Absence of long term contracts with Customers
• Competition from other producers and unorganized sector