Rs 17.1 - crore issue to entirely finance company's bio diesel
Online Bio plans rights-cum-public issue in Sept.
16 June: City-based Southern Online Bio Technologies
limited is coming out with a Rs 17.1 - crore rights-cum-public
issue to entirely finance its bio diesel project.
N Satish Kumar, managing director of Southern
Online Bio, said that the issue would open by September and
UTI had agreed to act as the lead managers to the issue. The
company would also list its shares on the Bombay Stock Exchange
(BSE) to create better value for its shareholders. The company
is at present listed on the Hyderabad Stock Exchange (HSE) and
the Bangalore Stock Exchange (BgSE).
Under the rights-cum-public issue being offered
at par, the company would offer 57lakh shares as the rights
which would be subscribed to promoters and their associates.
Shares totalling 1.14 crore would be offered to the public,
the Southern Online Bio managing director said.
Kumar said that the company would approach Sebi
for its approval for the issue next month and also seek an in-principal
nod from the BSE for listing. Post issue, the paid-up capital,
which is presently at Rs 5.36 crore, will rise to Rs 22.8 crore.
The authorised capital would rise from Rs 12 crore to Rs 23
crore. The net worth will rise from Rs 5.94 crore to Rs 24.43
crore. Promoters have to subscribe to minimum 20 per cent of
both rights and public issues. At present, their stake holding
in the company stands at 33.3 per cent.
Giving the break-up of the Rs 17.1crore bio-diesel
project, he said that the plant and machinery would cost Rs
9.2 crore, miscellaneous fixed assets Rs 1.32 crore, preliminary
operations Rs 2.76 crore and land-cum-civil works Rs 8.57 crore.
The company is setting aside Rs 1.09 crore as
the contingency fund and Rs 1.86 crore as margins for working
The company has acquired 10 acres at Choutuppal, 50 km from
the city, for setting up a plant to produce bio diesel using
oil seeds from trees such as pongamia pinnata, jatropha curcas.
"The plant with 30 tonnes per day or 90,000
tonnes per annum capacity would require around 100 tonnes of
seeds per day. The annual requirement of seeds is around 32,000
tonnes. As the current availability of seeds in the state is
less than 4,000 tonnes, we would use other raw materials like
acid oils, distilled fatty acids, animal fatty acids and non-edible
vegetable oils like neem, rice brawn etc, " Kumar said.
The company is entering into buyback arrangements
with farmers as well as plantation owners to source raw materials.
"Irrespective of quality of seeds, they will be procured
at Rs 4-4.50 per kg. The commitment is being made to the suppliers,"
Satish Kumar said the company was planning to
start the works shortly and expects the production to commence
by April 2005.
The company had already entered into agreements
with buyers like railways, Hyderabad and Visakhapatnam corporations
etc. The company had agreed to supply bio diesel at rates cheaper
than those of conventional diesel, he said.
Meanwhile, the company recorded a net profit
at Rs 4.631akh on a total income of Rs 3.1 crore for the year
ended March 2004. It earned a net profit of Rs 4.221akh on an
income of Rs 3.07 crore. The company is the largest B-category
internet service provider in the country with its operations
mainly in the city.
On the marginal rise in income and profits,
Satish Kumar said that the reason was the fall in bandwidth
prices which fell to around Rs 10,000 per month per64kbpsfromRs
14,000. As the bandwidth procurement prices also slid from Rs
16-18 lakh per mbps to Rs 12-14Iakh, the company had to pass
on the benefits to the customers. It increased its bandwidth
from 24 mbps to 36 mbps during 2003-04. Since April, the company
had raised its supply capacity by 18 mbps to 54 mbps and would
end the financial year with a bandwidth capacity of over 75
mbps, he said.