Sumeet Industries raises ₹200 crore through rights issue to fund expansion
AI Summary
Sumeet Industries has successfully raised Rs 200 crore through a rights issue, increasing its paid-up equity share capital to ₹139 crore. The funds will be allocated for strengthening working capital, operationalizing the Nakoda CP Plant, and setting up a solar power plant, which is expected to double production capacity and enhance operational efficiencies.
Sumeet Industries, a leading integrated polyester manufacturer, has raised Rs 200 crore through a rights issue.
The Board has approved allotment of 16.84 crore equity shares at an issue price of ₹11.86 per share. The rights issue was offered to eligible shareholders in the ratio of 8 rights equity shares for every 25 shares held.
Following the allotment of shares, the company’s paid-up equity share capital has increased from ₹105 crore to ₹139 crore.
The rights issue further strengthens the company’s capital base and provides the financial resources required to execute its strategic growth initiatives across manufacturing expansion, operational efficiency and balance sheet strengthening.
Of the net proceeds raised, the company plans to use ₹100 crore to strengthen working capital to support higher production levels and raw material procurement; ₹50 crore for general corporate purposes used for the operationalisation and integration of the Nakoda CP Plant; and ₹23 crore for prepayment of borrowings.
The company will allocate ₹22 crore to set up a 6.5 MW captive solar power plant to reduce power costs, improve energy security, and support sustainable manufacturing operations.
Sumeet Industries acquired a CP Plant under liquidation from Nakoda at Surat in Gujarat. The company plans to modify and recommission the facility in Q1 FY28. The plant has an installed manufacturing capacity of 140,000 TPA for Bottle Grade PET Chips, which serve as a key raw material for the company’s downstream POY and FDY manufacturing operations.
Upon commissioning, the facility is expected to double the company’s existing production capacity, strengthen its manufacturing scale, improve backward integration, enhance operational efficiencies and support future revenue growth.
Pratik R Jaju, Managing Director, Sumeet Industries, said the successful capital raise reflects investors’ confidence in the company’s long-term vision and growth strategy.
The fresh capital will enable the company to accelerate strategic priorities, including the operationalisation of the Nakoda CP Plant, which is expected to double existing production capacity, while strengthening working capital and balance sheet, he added.
Original Article
Published on Hindu BusinessLine