Wire and cable manufacturer Polycab has filed draft prospectus with capital market regulator SEBI to launch its maiden public offer. The Mumbai-based company is seeking regulatory clearances for the IPO which will be a mix of fresh shares and an offer for sale (OFS). Polycab IPO will involve fresh issuance of shares worth INR500 crore (INR5 billion), while promoters and existing shareholders plan to offload 24,886,823 shares.
Important among these are International Finance Corporation (IFC) which will sell 10,588,223 shares while promoters Inder T. Jaisinghani (2,843,000 shares), Ajay T. Jaisinghani (2,819,000 shares), Ramesh T. Jaisinghani (2,819,000 shares) and Girdhari T. Jaisinghani (2,829,000 shares) will also participate in the OFS. Other investors belonging to promoter group offloading their shares are Bharat A. Jaisinghani (720,300 shares), Nikhil R. Jaisinghani (720,300 shares), and Anil H. Hariani (698,000 shares). Polycab CEO Ramakrishnan Ramamurthi also plans to sell 850,000 shares in Polycab IPO.
IFC currently owns 15% equity stake in the company and plans to pare it to half through the public offer.
Polycab IPO: Use of funds
The company plans to use IPO funds towards repayment of borrowings (INR100 crore), to fund incremental working capital requirements (INR300 crore) and general corporate purposes.
As of 30 June 2018, the company had a total debt of INR694.8 crore, translating into a debt-equity ratio of 0.22.
The issue will be managed by Kotak Mahindra Capital company, Axis Capital, Citigroup Global Markets and Edelweiss Financial Services.
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The company is a well known name as a manufacturer of wires and cables. According to CRISIL Research, the company had a market share of 18% in the organized wires and cables industry in India. Its product portfolio includes power cables, control cables, instrumentation cables, solar cables, building wires, flexible cables, flexible/single multi core cables, communication cables and others including welding cables, submersible flat and round cables, rubber cables, overhead conductors, railway signaling cables, specialty cables and green wires.
Apart from wires and cables, Polycab manufactures and sells FMEG (Fast Moving Electrical Goods) such as electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories. Its vast production footprint includes 24 manufacturing facilities across the country.
Financially, the company’s consolidated revenues grew 14.1% in FY2018 to INR6,985.9 crore while its net income surged 60.6% to INR373.2 crore.