Sheela Foam Pvt Ltd – the company behind the Sleepwell brand – is aiming to bring its initial public offering (IPO). According to a report by Mint, the company has hired Edelweiss Financial Services Ltd and ICICI Securities Ltd to manage the upcoming IPO. A draft prospectus with capital market regulator SEBI is likely to be filed in the next quarter while the IPO may hit the markets before March 2017.
“The initial share sale will be majorly a primary fund-raising effort, however, the promoters might also sell some part of their shareholding through an offer for sale,” the report cited one of the two sources it contacted. The company is likely to use the funds to invest in additional manufacturing capacity and new product development, said another person with knowledge of the matter.
Sheela Foam is the leading player in India’s polyurethane (PU) foam-based mattresses market and claims to have 35% market share. On its website, the company claims to have 12 manufacturing units at Sahibabad, Surajpur, Greater Noida, Kala Amb, Rajpura, Kolkata, Sikkim, Silvassa (2 units), Talwada, Erode, and Hyderabad. The company sells its products under the Sleepwell and Lamiflex brands for the domestic and industrial applications through its sales network of 100 distributors and over 5,000 dealers in India.
Apart from mattresses, Sheela Foam supplies its products to a range of industries including automobiles, shoes, garments, and packaging. Under the leadership of Rahul Gautam, the company has expended into new geographies including Australia and Canada in the last decade. Sheela Foam acquired polyurethane and polystyrene business of Joyce, Australia in 2005.
Sleepwell joins the long list
The mattress market in India is largely dominated by domestic players and Sleepwell competes with peers such as Kurlon, Springfit, and Springwel. The company joins the long list of IPO hopefuls that are planning to benefit from the positive sentiments in the Indian primary market. According to the data compiled by IPO Central, 10 companies have raised INR67.43 billion (INR6,743 crore) so far this year through the IPO route. Following the expiry of IPO approval of Amar Ujala Publications Limited earlier this month, India’s IPO pipeline has reduced to 22 companies. Prior to Amar Ujala, AGS Transact Technologies Limited also let its approval slip away. AGS Transact Technologies received SEBI approval for IPO in May 2015. Once secured, SEBI approval for IPO is valid for one year.