Sah Petroleums plans to make an initial public offering worth Rs 32 crore (Rs 320 million). The issue will open on August 30 and will close on September 6.
Sah said that the companys focus on specialty industrial lubricants will ensure steady operating profit margins around 23%.
"We are in the markets since the last 30 years. Everybody has both strengths and weaknesses. Our marketing line up is strong with one to one customary relationship. We have got very specialised product for the customers. Timely deliveries and after sales service which is our very strong point and because of which we are able to compete with any other lubricant company in India today. We are confident about our products and our services," he said.
Talking about Sah Petroleum's expansion plan, he said ,"For the expansion of the company we are putting Rs 28 crore (Rs 280 million). On the sale expansion of the company we have got two plants one in Daman and the other is in Varsa. We have some working capital gaps. For that this IPO will be helpful. We want to open branches in India and abroad. We want to build the brand image of the company, that is what the IPO is for."
Talking about his company's strengths, he said "We are in the market since the last 30 years. Everybody has both strengths and weaknesses. Our marketing line up is strong with one to one customary relationship. We have got very specialised product for the customers. Timely deliveries and after sales service is our very strong point and because of which we are able to compete with other finance companies in India today. We are confident about our products and our services."
He also said, "The lubricant industrial markets is of two types. Either you offer the product off the shelf or you give the product. Normally the companies give the product what is off the shelf or what is their in the product marketing range. Today is the time when everybody wants higher productivity in the same oil, better finish, far better life for the tools, that is the place where our company is giving products. Our engineers go to the market. They study the requirements of the customers and we are able to solve the problems of the customers."
When asked about his clients, he said, "We are not in the bazaar trade(selling to retail investors). Bazaar trade is basically in the automobile grade. We are in industrial oil and industrial oil is supplied to all the big corporate house like Telco, Bajaj Auto, Bajaj Tempo, Road Transport Corporation, Hero group, etc. These are few of our larger clients."
Sah Petro plans automobile lubricants foray in two years
Mumbai-based specialty industrial lubricants company Sah Petroleum plans to enter the automobile lubricants industry in the next two years.
The companys products, which are marketed under the brandname IPOL, cater to clients such as Goodyear, Ceat, Tata Motors, Bridgestone and Eicher.
We are the producer of a wide range of specialty industrial lubricants, rubber processing oils and grease. We will be entering the automobile lubricants industry in the next two years after the infrastructure, marketing and distribution system are in place, said Rajendra Sah, chairman, Sah Petroleum.
The Indian lubricants market is the fourth largest in the world with an estimated consumption of more than 1.4 million tonne and a turnover of over Rs 7,000 crore.
The company has two manufacturing units at Vasai and Daman with a combined capacity of over 40,000 tonne per annum.
It is planning to double its capacity to over 80,000 tonne per annum by raising funds through an initial public offering (IPO) of Rs 31.78 crore, of which Rs 28 crore will be spend upon the capacity expansion of these two units. The IPO of 90,80,000 equity shares of Rs five each at a premium of Rs 30 per share will open on August 30.
The company is also planning to set up branches in India and abroad.
The key factors for this segment are a strong research and development base and a fully developed and comprehensive range of lubricants. The company will constantly introduce new products, said Sah.
Apart from entering the automobile lubricants segments, the company would continue to focus on its current segments of business.
For the financial year ended March 31, 2004, the company has recorded a profit after tax of Rs 8.05 crore, up by 228 per cent from Rs 2.45 crore last year.
The companys turnover increased to Rs 72.40 crore, up 32 per cent from Rs 54.89 crore last year. The shares of the company will be listed on the National Stock Exchange and the Bombay Stock Exchange.
Sah Petroleums Ltd has received clearance from Registrar of Companies (RoC) for its initial public offer (IPO). Sah Petroleums is a leading producer of a wide range of specialty industrial lubricants, rubber processing oils, greases, automotive lubes and various grades of other oils.
Sah Petroleum proposes to enter the capital market with its IPO, in the last week of August 2004.
For the financial year-ended on March 31, 2004, the company posted a turnover of Rs72.4-crore and a profit after tax of Rs8.04-crore up 31 per cent and 228 per cent respectively from Rs54.88-crores and Rs2.5-crore last year.
Karvy Investors Services Ltd and Fortune Financial Services (India) Ltd are the lead managers to the IPO and Karvy Computershare Pvt Ltd is the Registrar. The company plans to list its shares on NSE and the BSE.
I was looking at the article in the Hindu Business Line and it says, SAH petroleums is against stiff competition with the major oil tycoons. And because of the volatility of the raw material - oil, its a scrip to be avoided.