Precision components and assemblies company, Maini Precision Products has filed its draft red herring prospectus (DRHP) with market regulator the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). The offer consists of a fresh issue of shares worth INR500 million and an offer for sale (OFS) of up to 3.03 million shares by its promoters.
Dr. Sudarshan Kumar Maini, Sandeep Kumar Maini, Gautam Maini and Chetan Kumar Maini are promoters of Maini Precision Products. The OFS will include one million shares each by Sudarshan Kumar Maini and Reva Maini each, 500,000 equity shares each by Gautam Maini and Chetan Kumar Maini and up to 930,000 equity shares by Sandeep Kumar Maini. ICICI Securities and IIFL Holdings have been roped in as the book running lead managers for the IPO. The shares are proposed to be listed on NSE and BSE.
Utilization of Funds
The proceeds of the issue will be used for constructing new building for a manufacturing facility at Nelamangala, purchasing machinery, part pre-payment of debt and for general corporate purposes. Around INR169 million will be used for construction purpose while INR124 million is reserved for buying machinery. Another INR100 million will be routed towards paying debts.
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Incorporated in 1973, Maini Precision Products is Maini Group’s first company, although it is lesser known to its automobile making sibling which was subsequently acquired by Mahindra & Mahindra. Maini Precision Products is one of the leaders in precision components and assembly engineering, catering to diverse industries including automotive, industrial and aerospace sectors. The company manufactures more than 1,500 precision components and assemblies pertaining to hydraulics, material handling, automotive and off-highway and general engineering segments. It boasts of global clientele from countries like the USA, Europe, Austria, Spain, Brazil, Turkey, Canada and France. It also has the distinction of being the first Indian company to supply components to General Motors.
Maini Precision Products’ product range comprises of precision components, forgings, fuel filters machined castings and sub-assemblies used in engines, turbo chargers, transmissions, fuel injection along with steering and chassis for commercial and passenger vehicles.
The company has been conferred with awards from many clients: Bosch, Eaton, Westland Transmission and Stanley Black & Decker. It was awarded gold for Export Excellence Award the special category from Karnataka Chamber of Commerce and Industry for 2015 and Certificate of Excellence award by GE for being the best supplier in “lean & fast – 2015” category in India Suppliers’ Conference, 2015.
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Though the company’s revenue grew from INR2.58 billion in FY 2014 to INR2.79 billion in FY 2015, its net profits declined from INR119 million to INR106 million during the period. It earned 55.55% of its revenue from foreign customers for FY2015.
Pinebridge an investor but not exiting yet
Private equity firm Pinebridge currently holds a minority stake of 0.58% in Maini Precision Products. However, Pinebridge is not participating in the IPO as its stake has been agreed to be bought back by company promoters. Incidentally, Pinebridge’s other investments include Narayana Hrudyalaya and Uniparts which are also planning their IPOs.