RAK Ceramics plans Rs. 200-cr public issue.

Abu Dhabi-based RAK Ceramics is planning to tap the Indian capital markets to fund its expansion in the country. According to sources, the company is mulling a Rs. 200-crore initial public offer this year.

Abdallah Massaad, CEO, RAK Ceramics, told BusinessLine in an e-mail interview, 'We feel that the company is ready for an IPO as the capital markets are going through the right dynamics at the moment.' While Massaad did not divulge any further details, sources in the company said it will be filing the draft red-herring prospectus by next month.

RAK is listed on Abu Dhabi Stock Exchange and one of its subsidiaries on the Dhaka SE. The company, which manufactures ceramic tiles globally, plans to invest nearly Rs. 500 crore over the next four-five years, which includes setting up a greenfield facility in Gujarat. Besides, it plans to more than double its turnover to Rs. 2,000 crore by FY15, from Rs. 800 crore in FY13.

The Gujarat facility will be the company's second unit in India after the vitrified tiles plant in Andhra Pradesh, which has a production capacity of 28,000 square metres of tiles a day.

'The Indian ceramic market in the next five years will grow more than 70-80 per cent. China consumes about 4.5 square metre a head, while in Saudi Arabia it is seven square metre a head. India is at 0.6 square metre/head, so there is enough room to grow,' Massaad said. India's real estate market is all set to witness a major boom with the Narendra Modi-led Government planning to develop 100 smart cities in the next few years. This should give a boost to the ceramic tile industry.

Meanwhile, RAK plans to add 500 dealer showrooms to its existing network.


HBL