XL Telecom to tap market to raise Rs 60 cr

HYDERABAD: Hyderabad-based XL Telecom Ltd--with interests in mobile handset assembly, solar photo voltaic system and ethanol-- is planning to tap the capital markets to raise Rs 60 crore. The Rs 400-crore company is planning to divest 39.56 lakh shares of Rs 10 each, at a price band of Rs 125-150 per equity share.

The divestment constitutes 25% of the authorized share capital of the company while the balance stake would be held by the promoter. Of the total 39.56 lakh shares being divested, 50% will be for qualified institutional bidders (QIBs), 35% for retail buyers and 15% for high networth individuals (HNIs), said Dinesh Kumar, CEO, XL Telecom. The issue opens on December 4, 2006 and closes on December 7, 2006.

"Of the total sum being raised through the IPO, Rs 20 crore will be invested in setting up facilities for surface mounting technology (SMT) lines to produce parts used in mobile phones. About Rs 8-9 crore will be invested in stepping up the module making capacity of our solar photo voltaic division", said Mr Kumar. The division makes solar power plants and home and street lights based on solar energy. The rest will be used for the repayment of term loan and for working capital needs.

XL Telecom also has an ethanol production facility at Nanded in Maharashtra with a capacity of 1.5 lakh litres per day. "We have entered into supply agreements for three years with the major oil PSUs in the country", said Mr Kumar. The book runners to the company's public issue are Anand Rathi Securities and Centrum Capital Ltd.