Rathi Bars promoters own 16 underperforming ventures

New Delhi: The promoters of Rathi Bars, which will hit the capital market with a public offer on 18 October, have a host of non-performing and loss-making ventures in their stable.

“There are 16 ventures of the promoters which are yet to commence business operations and hence the income flow generation has not started. As a result, four out of these 16 ventures have incurred notional losses during the last three financial years,” the company stated in the prospectus filed with Sebi for issue of 71.43 lakh shares of Rs10 at a premium of Rs25.

Also, Rathi Bars which proposes to raise Rs25 crore from the public to fund expansion and modernisation of steel projects, did not opt for grading of initial public offer (IPO) leaving the onus of judging the IPO on the investors.

The public issue of Rathi Bars, which constitutes 43.74% of diluted post issue paid-up capital, is open for subscription between 18-23 October.

The company, which has a net worth of Rs26.32 crore as on 31 March 2007 posted a net profit of Rs7.77 crore during 2006-07, up from Rs6.12 crore in the previous year.

According to the prospectus, one of the promoters of Rathi Bars, Anupam Rathi, had figured in the Reserve Bank’s list of loan defaulters (June 2005), maintained by the Credit Information Bureau, as director of G D Rathi Steel Ltd.

His name, however, was deleted from the RBI list following settlement of the issue by the company.