The initial public offering of Emmbi Polyarns, a polymer processing firm based in Mumbai has opened for subscription today. The initial public offering involves 95,74,000 equity shares of Rs 10 each.

A price band of Rs 40 to Rs 45 per equity share has been fixed for the issue. The price band would discount its annualised six-month 2009-10 earnings by 12-14 times on the pre-offer equity and by 29-32 times on post-offer equity base.

The IPO will close for subscription on February 3. A minimum bid of 150 equity shares has been fixed and in multiples of 150 shares thereafter. Analysts believe that the issue is priced at the higher side and also there are risks of company being able to execute such huge expansions.

The company has reserved 50,000 equity shares for subscription by eligible employees. The issue will account for 55% of the post issue paid-up capital of the company.

The capital raised will be used for meeting working capital requirements and for expansion in the present facility to increase the installed capacity from 5,000 MTPA to
17,800 MTPA.

The project would be implemented in phases, the first phase is due for completion in May 2010, while second phase is due by December 2010 is in the initial stages.

Emmbi mainly focuses on packaging solutions. It is engaged in selling products such as Woven Sacks and various woven polymer based products like Container Liners, Protective irrigation system, Canal Liners, Flexi Tanks, Car covers etc. The company counts companies such as Tata Chemicals, Godrej Industries and ITC among its customers.

The company also plans to increase its overseas trade; the share of exports to total revenues is at 58 per cent presently. In the six months ended September 2009 the company recorded a net profit of Rs. 1.21 crore on net sales of Rs. 23.2 crore.

Keynote Corporate Services Ltd is the book running lead manager while Datamatics Financial Services is the registrar for the issue.