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Airolam IPO; Creates Hope for Organised Small Players Who Have Will Power and Wish to Generate Capital

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With a capacity to produce 3 Lakh sheets of HPL every month, Airolam Limited, a leading laminate producer from Ahmedabad brought its IPO worth 15.5 cr on SME platform. With an annual turnover of 70.85 Cr, Airolam Limited went ahead with IPO plans because they believed in their working and concept. The investors have reiterated their faith by over subscribing Airolam IPO by 31 times. This euphoria for small IPO shows that, there are investors who can put money in your vision and dreams if you have honesty and organised working commitment with a target bound approach and clean paper work in the past. The investors are bullish on building material segment, especially interior sector irrespective of whether you are a Plywood manufacturer or a laminate company. If we see the stock performance of Rushil décor, Ambition Mica then you may get a peek into the investors faith and hence crating opportunity for many new IPO’s from wood panel industry.

The Ply Reporter receive queries regarding good companies who can be getting on the IPO route to grow their factories and volumes but there are hardly .001% who are really able to understand the opportunity. The interaction with Airolam promoters shows that if one has a clear vision for its product and brand, by adding capacities and brands can be made possible with right approach.

INTERACTION WITH
MR. PRAVEEN PATEL,
MD, AIROLAM LTD 

The Ply Reporter interacted with Managing Director of AIROLAM to know the future plan after this successful IPO. Such a thumping response for a laminate company, IPO is making this interaction as a very curious read of the hour.

 Q     Airolam IPO is over subscribed by 31 times, massive response! What’s your view?

 A     The credit for such a phenomenal response goes to the people who have shown faith in the company and its working. It was indeed a combined effort of promoters, directors, distributor, Airolam dealers, Architects, merchant bankers, legal advisors, related banks, syndicate members, statutory & peer review auditors, etc. Without a collective contribution, we would not have been this far. We are happy to express that due to overwhelming response of our investors, the initial public offer (IPO) of Airolam Limited was over-subscribed by 31 times means company got the subscription about Rs. 477 Cr against IPO size of Rs. 15.20 Cr.

 Q     What is your message for the investors? How they can receive better return with Airolam shares?

 A     We are really thankful to all the investors who believe in our company. We assure everyone that company is already working in the right way that will lead to
growth, better earnings and hence investors will receive handsome return in future against their investment. All they need to do is to keep patience and faith and walk together for long term trust and relationships.

 Q    What Airolam intend to do with the generated fund? How this will help in Airolm Ltd growth?

 A     We intend to utilize the net proceeds from public issue towards ‘Funding for the working capital requirements’ and ‘General Corporate Purpose’. We also believe that ‘Listing of Equity Shares will enhance corporate image, brand name of our company and create a market for our equity shares in India.

 Q    How much growth do you anticipate in coming two years for the company?

 A    We are expecting a growth of 25-30 percent in coming years by modifying our production utilization process from 75 to 95 percent. Last year we did a turnover of Rs. 70.85 Cr but we have immense potential to grow by double of the size in short time. We intend to introduce new variety of products in the market viz ‘ready to use door’, ‘Airo LamiPanel’, ‘Plywood & Decorative veneers etc. We are planning to produce at least 2000 Airo LamiPanels per day. We are anticipating growth from our new products.

 Q    Is ‘Ready to use Doors’ means a new vertical other than HPL?

 A   Door is a very happening product category where we see a big scope for Airolam. We are planning to launch ready to use door as our new products category by which we are expecting the growth of around 16-17% in our total turnover.

 Q   How do you expect the growth of 1 mm laminates in future?

 A   Due to increase in awareness of end-user in the laminate sector and substantial growth of real estate sector, demand of plywood and decorative laminates is going up and we expect very good demand for decorative laminates and plywood in coming years. We are expecting growth of up to 20-25 percent in 1 mm laminates segment due to growing urbanisation, fashion driven interiors and increasing roles of interior designers.

 Q   Will GST be a help for Airolam growth in coming years?

 A   GST is really beneficial for our company after a while because compared to previous taxes, GST rates are lower with 18.0 % which is very favourable for our kind of brands who are committed to do organise working. In fact post GST the tax rates are lesser and hence all shall become formal and do transparent business. Our company is certainly going to achieve new milestones due to GST but in longer run.

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