IPO Note - Empee Distilleries Limited - Thefinapolis

PF/ IPON / 01112007 / 326 01 November 2007
Empee Distilleries Limited
IPO Snapshot About the Company
Type of issue 100% Book Building Issue
Price Rs.350 – Rs.400 per Equity Share
No. of shares 48,00,000 Equity Shares
Issue Size Rs.168 crore – Rs.192 crore
Issue Opening November 01, 2007
Issue Closing November 06, 2007
Face Value Rs.10
Application Size
Book Running
Lead Manager
Registrar To The
Issue
Retail Investors
Non-Institutional
Investors
Qualified
Institutional
Buyers
15 equity shares and in multiples
of 15 equity shares each
Almondz Global Securities Limited
Cameo Corporate Services Limited
Allotment Basis
Not less than 16,80,000 equity
shares or issue less allocation to
non-institutional investors and
QIBs
Not less than 7,20,000 or net issue
less allocation to retail investor &
QIBs
Not more than 24,00,000 equity
shares or net issue less allocation
to retail investor & institutional
investors
The issue will constitute 25.26% of the post issue paid up
capital of the company
Registered & Corporate Office of the company is:
Empee Distilleries Limited
693 Mount Road, Chennai – 600 006 Tamil Nadu
Tel: +91 44 2829 7111 Fax: +91 44 2715 6231
Website: www.empeegroup.co.in
Corporate Identification Number:
U1511TN1983PLC010313
Contact Person and Compliance Officer:
Mr. N.S. Suryanarayanan, Vice President (Corporate
Affairs) and Company Secretary
Empee Distilleries Limited is mainly in the business of
manufacturing of Indian Made Foreign Liquor (IMFL)
under its own brand portfolio as well as under tie-up
with arrangements with other companies.
The brands under the company’s portfolio are Old
Secret XXX Rum, Power XXX Rum, Power Brandy, Mc
Lene Ordinary Brandy, Mclene XXX Ordinary Rum,
Power Whisky, Empee Napoleon Premium Brandy,
Empee Fine Brandy, Commando XXX Rum, Club Polo
Dry Gin, Club Royal Whisky, Elcanso Dark XXX Rum
and Old Secret Brandy. The brands under tie up
arrangement are Brihans Napoleon Premium Brandy,
Brihans Premium Whisky.
At present the company has distillery units in
Kanchipuram District, Tamil Nadu and in Palakkad
District, Kerala.
The company is one of the major suppliers of IMFL to
Tamil Nadu State Marketing Corporation Limited
(TASMAC). The company entered the beverages and
distillery industry in the year 1984 by setting up its
first distillery unit with an installed capacity of 2000
cases / day and 2 semi-automatic production lines.
The company also has a wind mill energy plant in
Coimbatore District, Tamil Nadu with licensed and
installed power capacity of 2MW.
Subsidiary companies are: (a) Empee Sugars and
Chemicals Limited; (b) Empee Power Company (India)
Limited.
STRENGTHS
The competitive strengths of the company are:
1. Entry barriers for new entrants
2. Established manufacturing facilities
3. Brand presence
4. Lower marketing costs
5. Experienced management team
PROMOTERS
Capital Structure
Individual promoters: Mr. M. P. Purushothaman
Corporate promoters: Empee Holding Limited
Details Nominal Value @ Rs.10 / share
Authorized Equity Capital: 3,00,00,000 shares 30,00,00,000
Existing Equity Capital: 1,42,04,000 shares 14,20,40,000
Present Issue: 48,00,000 shares 4,80,00,000
Equity Capital after Issue: 1,90,04,000 shares 19,00,40,000
Report prepared by Atul Stanley Hermit – atul.hermit@karvy.com, Phone No. 040 - 23312454 Extension - 304

PF/ IPON / 01112007 / 326 Empee Distilleries Limited
Disclaimer
Objective of the Public Issue
Empee Distilleries Limited intends to utilize the proceeds of this public issue for the following purposes:
S.
No.
Objectives
Estimated Cost
(in Rs. Crore)
1 Setting up of 60 KLPD Grain Based Distillery Unit at Nellore District, Andhra Pradesh 61.14
2 Setting up of Blending & Bottling IMFL Plant at Nellore District, Andhra Pradesh 21.88
3 Setting up of 7.5 MW Bio-mass based Power Plant at Pudukottai District, Tamil Nadu 34.75
4 Development of 2.00 Lakhs sq.ft. of residential space at Kanchipuram District, Tamil Nadu 31.07
5 Expansion of existing distillery units 20.10
6 Relocation of plant and machinery purchased for expansion purpose 10.21
7 General corporate purposes -
Company Financials
Key performance (unconsolidated) figures for Empee Distilleries Limited are (in Rs. Crore):
Particulars
Period ended
30/6/2007
Year ended
31/3/2007
Year ended
31/3/2006
Year ended
31/3/2005
Year ended
31/3/2004
Total Income 478.81 482.99 331.74 210.14 156.82
Net Profit after Tax 14.62 8.89 5.65 2.86 3.03
Total Assets 173.18 119.27 82.91 59.15 48.59
Total Liabilities 119.93 80.56 53.52 36.21 28.92
Net Worth 53.25 38.71 29.39 22.94 19.67
EPS (in Rs.) - 6.26 3.98 2.01 -
Return on Net Worth - 22.98% 19.23% 12.45% -
Board of Directors
Mr. M. P. Purushothaman, Chairman & Managing Director
Ms. Nisha Purushothaman, Joint Managing Director
Mr. Shaji Purushothaman, Executive Director
Peer Group Comparison
Business Strategy
The key elements of the business strategy of Empee Distilleries Limited are:
1. Expansion and backward integration of existing operations.
2. Horizontal expansion.
3. Business diversification.
4. Enhancement in market share of distillery products.
Mr. M. K. Mohan, Independent Director
Note: PLEASE READ THE OFFER DOCUMENT / PROSPECTUS CAREFULLY BEFORE INVESTING.
Lt. Gen. R. S. Nagra (Retd.), Independent Director
Mr. T. S. Raghavan, Independent Director
Comparison of accounting ratios of some companies, in the same line of business (with same income levels):
Company Name EPS (in Rs.) P / E Ratio RoNW (in %) NAV (in Rs.)
Balaji Distilleries Limited - - - (72.10)
Jagajit Insutries Limited 3.50 27.10 7.70 42.60
Radico Khaitan Limited 3.00 62.10 18.70 17.10
Empee Distilleries Limited 6.26 - 27.46 40.44
Source: Capital Markets Volume 08- 21, 2007 (Industry – Beverages & Distilleries)
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