CARE Assigns ‘IPO Grade 3’ To Cords Cable Industries

MUMBAI: CARE has assigned `CARE IPO Grade 3` to the initial public offer of Cords Cable Industries Ltd. The grade indicates “Average Fundamentals”. Cords Cable is planning an IPO of 35 lakh equity shares of Rs 10 face value.

The grading reflects vast experience of Cords Cable’s promoters and management in the cable industry, consistent track record in terms of revenue and profits, diverse and reputed clientele and future potential for growth in business due to favourable outlook for power sector, CARE says.

However, the risks relating to successful implementation of on-going plus planned projects and pressure on margins due to intense competition in future are grading concerns.

Cords Cable was incorporated in Oct 1991 by three professionals, Naveen Sawhney, DK Prashar and Rakesh Malhotra, who were earlier working with Delton Cables. CCIL started its operations by manufacturing co-axial cables and instrumentation cables and its present product mix consist of low tension power cables, control & instrumentation cables and speciality cables.

CCIL currently manufactures cables up to 1.1 kv at their manufacturing facility in Chopanki, Rajasthan for various applications and caters to the requirements of industries in steel, power, chemical, cement, fertilizer, refineries. The main raw materials used are copper, aluminium, PVC resin, XLPE, GI wire, aluminium tapes, thermo couple. Raw material costs has always been a major contributor to total operating cost, thereby making profitability sensitive to their prices.

The IPO proceeds will be used for part funding the project of setting up production facilities for high tension & rubber cables, enhancement in long term working capital requirements and for general corporate purposes.