Birla Cotsyn India Ltd IPO

Birla Cotsyn India Ltd is a rapidly growing company under the banner of Yash Birla Group. The structure of IPO and their listing are mentioned in the article below. Certain risk factors associated with the IPO have also been documented.

Company overview:

Originally set up in the year 1941 on the 24th day of September, the name of the company was Jamod Ginning Company Private Ltd. The company was re christened as Birla Agro private Ltd in the year 1998, 8th October. Finally, in the year 2005 on 9th December, the company got its name- Birla Cotsyn India Private Ltd. It attained the status of a Public Limited Company on the 30th day of May, in the year 2006 under the present name of Birla Cotsyn India Ltd.

Considered as a flagship company of the Yash Birla Group, Birla Cotsyn India Ltd has "Synthetic Blended Spun Yarn" unit for manufacturing purpose.

The Birla Cotsyn India Ltd IPO- structure and listing:

The equity shares offered by Birla Cotsyn India Ltd were each Rs 10 amounting to Rs 14418.00 lacs.

Issue structure:

The Issue structure comprises of:

Contribution of the promoter, which amounts to Rs 3665.00 lacs, each of Rs 10.
With regard to employee reservation, the cost of the equity shares is Rs 10 per share and amounts to Rs.725.00 lacs.
Issues for the public is Rs 10 per share and amounts to Rs 10028.00 lacs.

In case of the net issue offered to the public, the following categories are taken into account:

QIB or Qualified Institutional Buyers
Non Institutional Buyers
Mutual Funds
Retail Buyers.

The Issue was made available by means of cent percent Book Building Process.

Listing of Birla Cotsyn India Ltd IPO (Initial Public Offer):

The equity shares offered by Birla Cotsyn India Ltd traded on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE).

Risk factors associated with Birla Cotsyn India Ltd IPO:

Investing in IPO involves quite an amount of risk. These risks may be of various types. Given below are few instances.

The company intends to expand and for this it has undertaken a project. This project is mainly financed by the capital raised from the initial public offer(IPO). In the event, if the IPO gets delayed, the project initiation may be late.
In the event when there is a shortage in the supply of cotton, business may get affected in a negative manner.
The company banks on raw materials, which are made available from external sources.
If there are undulations in the exchange rates, the import of new machinery as well as equipments may be hampered.

If a company intends to launch IPO, all details of the company as well as information pertaining to the offerings(Issue) are made available in the Draft Red Herring Prospectus or DRHP.