The main objective of the IPO is to set-up a fully owned thick film material (TFM) manufacturing subsidiary in the US. TFM is primarily used in integrated circuits for a number of applications in PCs, communication equipment, defence, aerospace and automobile. Arraycom's TFM manufacturing technology is licensed from El Du Pont of USA, which is the biggest TFM manufacturer in the world with a 60 per cent market share.

In addition to its proposed TFM plant in the US, the company also plans to finance strategic acquisitions in communication, networking navigational aids, SCADA and telemetry business. It will also partly pre-pay its foreign currency loan to IFCI, set up in-house software facilities and a new assembly line for SMT products used in communication and related business.

The total cost of the project has been pegged at Rs 72.71 crore. While Rs 58.50 crore is being financed through the current equity offering, the balance Rs 14.21 crore will come from internal accruals.

The Ahmedabad-based Arraycom is promoted by the same promoters who has promoted Parekh Platinum, which went public in 1995. For the nine month period ended December 1999, Arraycom earned a net profit of Rs 7.85 crore from a total income of Rs 44.76 crore. For the full year ended March 2000, the company expects to earn a net profit of 10.28 crore from a total income of Rs 51.12 crore.

Compared against its fiscal 1999 performance, for the fiscal 2000, while total income growth is at 105 per cent, net profit growth is 175 per cent. For the fiscal 2001, the company expects to earn a net profit of Rs 19.15 crore from a total income of rs 88.75 crore.

The issue is being lead managed by SBI Caps. The shares of the company will be listed at the BSE, NSE and Ahmedabad Stock Exchange.