The initial public offering (IPO) of Pentagon Rubber has opened for subscription on Monday (June 26) and the issue will be closed on June 30.

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The company is expecting to raise close to Rs 16 crore via an issue of 23.1 lakh equity shares at the upper end of the price band.

Mohali-headquartered Pentagon Rubber makes rubber conveyor belts, transmission belts, rubber sheets, and elevator belts.

The IPO proceeds will be used to meet the working capital requirements, general corporate purpose, and issue expenses. The additional working capital will help in the expansion of its business activities.

The shares will be listed on NSE-Emerge. Beeline Capital Advisors Pvt Ltd is the book-running lead manager to the issue, and Link Intime India Pvt Ltd is the registrar.

According to the red herring prospectus, the funds raised through the IPO will help the company to increase its turnover by 55-60 percent.

Pentagon Rubber is already expanding its production capacity with the help of internal accruals and borrowings. The expanded capacity by December 2023 will be 6,00,000 metres or up to 2.5 times the existing capacity of 2,40,000 metres.

For the year ended March 31, 2023, Pentagon Rubber's total revenue stood at Rs 35.12 crore. The company's EBITDA was Rs 4.29 crore and it reported a net profit of Rs 3.09 crore.

Incorporated in 2004, Pentagon Rubber — promoted by Anil Jain, Lalit Jain, Ashish Jain, and Saurabh Jain — has a manufacturing unit at Dera Bassi, Punjab.

(Edited by : Shoma Bhattacharjee)