Minar International Ltd. (Minar) started operations as proprietary concern in 1981, became a partnership in April 1995 and was subsequently converted into a public limited company in January 2006. The company has two CMT (cut, machine and trim) units at Vasai near Mumbai with a capacity to manufacture 10,000 sheet sets per day.

Minar proposes to integrate backwards by setting up a wide-width fabric processing unit in Erode district, Tamil Nadu, with a capacity to process 60,000 metres of fabrics per day. The project is estimated to cost Rs. 1,356 million and is expected to be fully funded out of the IPO proceeds.

For the nine months ended December 2005, Minar reported a net profit of Rs 90 million on an operating income of Rs 2.43 billion. On an annualised basis, operating income for 2005 was higher by 13 per cent as compared with the corresponding figure in 2004, and net profit for the comparable period was higher by 75 per cent.

CRISIL Grading :

CRISIL has assigned a ‘CRISIL IPO grade 2/5′ to the proposed initial public offer of Minar International Ltd (Minar). The grading reflects the good track record of the promoter Mr. U.K. Nambiar, who has a cumulative experience of over 40 years in the textiles business and the strong growth prospects for export of made-up textiles from India to the US which is expected to nearly double over the next five years.

The grading is constrained by the company’s high dependence on the skills of Mr. Nambiar for business continuity, the lack of adequate experience in setting up or running large textile manufacturing facilities (although the company owns a CMT facility), the inexperienced second line of management and a challenging business environment post removal of quotas, as large US buyers prefer larger vertically integrated suppliers.

The grading also reflects the lack of adequate corporate governance systems in the company, the existence of other promoter-owned entities in similar lines of businesses and the past instances of legal non-compliance by the company.

Cumulative Bid Details

Not Available at this time.