Nuziveedu Seeds has become the latest company to receive market regulator SEBI’s final observations for launching initial public offering (IPO). On its website, SEBI said it issued its observations on Nuziveedu Seeds’ IPO application on 5 August 2015. SEBI observation amounts to approval for companies to bring their IPOs. The regulator took 105 days to approve the IPO. Nuziveedu Seeds is India’s largest hybrid seeds company.
The Telangana-based company had filed draft red herring prospectus (DRHP) with SEBI on 22 April 2015 through Axis Capital Limited. In its prospectus, the company said it planned to raise INR125 crore through the sale of new shares. In addition, existing investors plan to sell 1.18 crore shares through an offer for sale (OFS). The issue will be managed by Axis Capital Limited, IDFC Securities Limited, JM Financial Institutional Securities Limited and J.P. Morgan India Private Limited while Karvy Computershare Private Limited will be the registrar.
Use of funds
Out of the INR125 crore the company plans to raise through the IPO, majority will be spent towards repayment of borrowings. Nuziveedu Seeds has not yet decided the quantum of funds it will use towards debt repayment. As of 28 February 2015, Nuziveedu Seeds had secured borrowings of INR439.95 crore. The company also plans to reserve some funds for general corporate purposes.
Out of the 1.18 crore shares, 98.91 lakh shares will be offered by Mandava Prabhakara Rao. Rao is the promoter of the company and holds 2.49 crore shares amounting to 25.77% of the company’s total shareholding. Existing investor Blackstone plans to offload 19.8 lakh shares through the IPO. Blackstone invested in the company between February 2011 and in January 2014. The private equity player currently holds 1.01 crore shares or 10.56% in Nuziveedu Seeds.
With the latest approval, India’s IPO pipeline now swells to 23. Last month, SEBI approved Pennar Engineered Building Systems Limited, Numero Uno Clothing Limited, and Sadbhav Infrastructure Project Limited to bring their IPOs. Apart from these 23 companies allowed by SEBI to bring IPOs, several players have recently filed prospectus with the regulator. These includes some prominent names like Café Coffee Day’s parent Coffee Day Enterprises Limited (CDEL), staffing firm Quess Corporation, realtor Paranjape Schemes, telecom infrastructure player Viom Networks, and IndiGo parent InterGlobe Aviation Limited.