In the Capital Market

mid-1986.
In the Capital Market XLO Machine Tools promoted by XLO India, is entering the market on March 3 with a public issue of 41 lakh equity shares of Rs 10 each at par. Out of this, 10 lakh shares have been reserved for allotment to the promoter company. The public issue is managed by H L Financial Consultants and Management Services and Central Bank of India. The issue is being made to meet the cost of acquiring land, buildings, plant and machinery, stock, etc, and to raise long-term resources for working capital requirements. The company proposes to purchase the assets of the machine-tool division of XLO India, which has been regularly supplying special purpose, high value, quality machines to top-class companies in the country. The promoter company will also transfer the foreign technical collaboration agreements to the new company. The new company would have an added advantage of the promoter company's skilled labour force and established network of marketing. It has already on hand orders for Rs 4 crore and negotiations are in an advanced stage for further large orders from first-class companies. The company is also planning to invest Rs 4 crore in the next 8 to 10 months for the purchase of high-tech latest technological machines and is in the process of identifying plant and machinery in Western Europe. According to S C Saran, Chairman, the new plant and machinery is expected to be installed by June 1987, or even earlier, and this investment is expected to be met out of borrowings including foreign currency loans. After this addition to the plant, the company's profitability will increase considerably. The company expects a turnover of Rs 6 crore in the first year of operations (1985-86) and a profit before tax of about Rs 32 lakh. For 1986-87, the company expects a turnover of Rs 9.62 crore with profit before tax of about Rs 2 crore. No tax liability is anticipated for both these years. The company is confident of paying a maiden dividend for the second year of its operations.