Sheela Foam Pvt Ltd – the company behind the Sleepwell brand – is aiming to launch its IPO later this month. A report by DealstreetAsia said the company is planning to bring the INR510 crore (INR5.1 billion) IPO in the second-half of November as December tends to be a difficult month for raising funds. The Sleepwell parent received SEBI approval to float the IPO early this month. Sheela Foam IPO will be managed by Edelweiss Financial Services and ICICI Securities while Link Intime has been appointed the registrar.
The company is yet to file a red herring prospectus for the upcoming IPO but its draft prospectus said the public offer will be entirely a sale by existing shareholders. The Offer For Sale (OFS) will be made by Polyflex Marketing which is one of the promoters of Sheela Foam. Polyflex Marketing owns 13,537,674 shares or nearly 27.75% equity stake in the leading mattress company of India. As a result, Sheela Foam will not receive any proceeds from the upcoming IPO.
According to the IPO prospectus, Sleepwell parent registered a turnover of INR1,566.8 crore in FY2016 and earned a net profit of INR104.7 crore. Apart from Sleepwell, the company sells its products under the Lamiflex brand for the industrial applications. It claims to have a nationwide sales network of 100 distributors and over 5,000 dealers while enjoying revenue share of between 20-23% in the organized Indian mattress market. Apart from India, the Rahul Gautam-promoted company sells its products in Australia and Canada where it has expanded in the last decade.
Promoters active in political circles
Sheela Foam promoter Rahul Gautam comes from a politically active family. Gautam’s grandfather Mohan Lal Gautam was a freedom fighter and served as a Member of Parliament under Congress. However, Rahul Gautam is aligned with BJP. Despite the success of the company and its business, it does not have any external investor and remains completely owned by promoters.
Sleepwell parent’s IPO will come after successful listings of Endurance Technologies and PNB Housing Finance, although Varun Beverages was marginally negative. Currently, the IPO of GreenSignal Bio Pharma is open and is struggling to get institutional buyers on board.