JHS Svendgaard Laboratories

JHS Svendgaard Laboratories Ltd, manufacturer of dental and oral healthcare products,came out with its initial public offering of 67 lakh equity shares of Rs 10 each at a price band of Rs 49 to Rs 58 per share in October 2006, just two months ago. Close to 50 % of its stock was issued at Rs.58. The promoters themselves subscribed to 5,00,000 shares out of a total issue of 67,00,000 shares in the issue.

The company is using the proceeds of the IPO to set up an integrated manufacturing facility at Kala Amb in Himachal Pradesh and increase its capacity at its 100 per cent Export Oriented Unit in Noida. The plant in Himachal Pradesh will provide location and tax advantage to the company. It will import an anchor free technology enabled machinery to manufacture modern toothbrushes.

The expansion plans will cost the company Rs 51.77 crore, which will partly be financed through the IPO and partly through debt.

JHS Svendgaard is into Toothbrushes, Toothpaste, Whitening Gel, Whitening Mouth Rinse, Denture Cleaning Effervescent, Tongue Cleaners.

They have existing production facilities (Unit I & II) at New Delhi and a 100% Export Oriented Unit at Noida Special Economic Zone (Unit III) in the State of Uttar Pradesh.

JHS handles job work for many major companies within India as well as abroad. Some of the clients of JHS Svendgaard labs are Dabur, Boots Pharmaceuticals, Amway. They also indicated sometime last year that there was a possibility of a major order worth $20 million from Walmart.

JHS labs is a ISO 9001 certified company with all gmp systems in place for manufacturing as per the highest quality standards globally.

They're a government of India recognized star export house which provides them a green card clearance . Their goods are cleared for both import-export on self certification basis. They have a capacity to produce over 100 million toothbrushes,2800 tonnes of toothpaste and 60000 litres of mouthwash.

The company was incorporated on October 8, 2004 by taking over two proprietership firms. The capacity utilization of the past few years and that projected over the next few years is as below:

JHS labs, considering its recent issue at Rs.58, almost twice the current market price of Rs.31 and its major expansion plan seems an excellent investment. (BSE Code 532771).