Sita Shree Food Products Ltd. IPO opens 11th March, price band fixed at Rs.27 to Rs.30

Company Brief

New Delhi, March 03, 2008

Sita Shree Food products Limited, a wheat and pulses processor and supplier of products to major players in retail industry such as Pantaloon Retail and Reliance Retail, proposes to enter the capital markets on 11th March 2008 with a public issue aggregating Rs.31.50 crores through 100% book building process. The price band has been fixed at Rs.27 to Rs.30 and the issue closes on 14th March 2008. The issue has been graded by CARE as "IPO grade 2". Keynote Corporate Services Ltd. is the Book Running Lead Manager to the issue and Ankit Consultancy Pvt Ltd. is the Registrar to the issue. The equity shares are proposed to be listed on BSE and NSE.

The Company proposes invest the net proceeds of the issue to part finance its Rs 48.12 crore expansion plan. The plan include setting up of a Solvent Extraction Plant having 500TPD capacity, a oil refinery for Solvent Extraction Plant having 100TPD capacity, a Lecithin plant for processing the by products of Solvent Extraction Plant having 5TPD capacity, and a Flour Mill of 275TPD. The proposed project will be set up at Badiakima, Indore, Madhya Pradesh just 8 km away from existing location. The Company has received sanction from Union Bank of India for term loan of Rs 10 crores. The promoters have already brought in their contribution  of Rs 6.24 crores.

Sita Shree's existing plant is located at Indore on 2.5 acres of land. Its product portfolio consists of Wheat Flour, Maida, Rawa, Daliya, Suji, Chana Dal etc. These products are marketed under its own brand like "Sita Shree", "Regular" and "Sita Shree Gold" or sold to other brands. Its turnover is dominated by bulk packing products segment. Ever since incorporation the Company is on growth track and has achieved a turnover of Rs. 80.74 crores and profit after tax of Rs 92.92 lacs for the year ended March 31, 2007. For the first 7 months of the current fiscal ended on October 31, 2007 the turnover was Rs 50.17 crores and PAT was Rs 59.17 lacs.

The Company started its business in the year 1997 and entered into joint venture agreement with Godrej Pilsburry Ltd. for manufacturing of Atta through the Company's plant. The Company terminated said agreement in 2002 and started manufacturing under its own name & brand. In past, the Company has also catered to the requirement of multinational companies like Uniliver as a production hub for manufacturing atta for their brand "Annapurna".

Increasing cultivation of soybean in Madhya Pradesh and growing demand for Soya Oil and its by-products due to its nutritional values has enabled the Company to identify opportunity of investment in soybean extraction business.

The Government of India's focus towards food processing industry as a priority sector is expected to ensure policies to support investment in this sector and attract more FDI. India, having access to vast pool of natural resources and growing technical knowledge base, has strong comparative advantages over other nations in this industry. The food processing sector in India is clearly an attractive sector for investment and offers significant growth potential to investors. The Confederation of Indian Industry (CII) has estimated that the food processing sector has the potential of attracting US$ 33 billion of investment in 10 years and generate employment of 9 million person-days.

For further information please contact:

Concept PR

Poonam Mathur

Tel: 23701250 / 56