Tulsi Extrusionshot

Abstract:
In this paper we will discuss about TEL IPO. Tulsi Extrusions plans to issue its IPO in this year. The aim of the company behind public issue is to expand its production units. We will also highlight some vulnerable areas in the company for which risk is associated with TEL IPO.
Tulsi Extrusions Ltd (TEL) is all set to issue its initial public offer (IPO). It is more likely to be launched in the market on 25th February of this year. The last date for the subscription of Tulsi Extrusions’ IPO was 5th February. Tulsi Extrusions is basically a PVC pipe producing company.

It is a medium scale company who operates from several states in India, namely, Assam, Gujarat, Delhi, Maharashtra and West Bengal. TEL mainly manufactures HDPE pipes, SWR pipes and fittings, PVC casing, PVC fabricated fittings, ASTM plumbing pipes, PVC pipes and LLDPE pipes.

The company aims to collect Rs 48.5 crores through public issue to finance its several upcoming projects. TEL will release more than 5.65 million shares in the market. For the financial year 2007, TEL’s net profit amount was Rs 4.16 crores while net sales was Rs 59.16 crores.

Objective of Issuing the IPO:
TEL wants to expand its manufacturing units. It plans to open a new unit in Maharashtra.
TEL expects a huge amount of profit from its IPO which will fulfill the company’s requirement of capital.
By using the expected money from IPO TEL will be able to solve many other production related issues.

Risks:
Several risks are associated with the TEL IPO due to some organizational and operational weaknesses.

These are:
TEL is not organized properly.
The amount of outstanding loan is high.
For the raw materials, TEL has to depend upon several external agencies. Therefore, it will not be able to nullify the price risks.

 

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Last Updated on : 30th July 2013