Prince Pipes and Fittings Ltd, a maker of PVC pipes for plumbing, irrigation and sewage, on Wednesday filed its draft proposal with the Securities and Exchange Board of India (SEBI) for an initial public offering.
The IPO size is Rs 700 crore ($106.5 million), according to the draft red herring prospectus filed with SEBI. Mumbai-based Price Pipes will issue fresh shares worth Rs 500 crore and its promoters will sell shares worth Rs 200 crore.
Prince Pipes joins a clutch of companies looking to go public to benefit from the stock market boom in India this year. The company will join listed peers Astral Poly Technik, Jain Irrigation Systems and Finolex Industries on the bourses.
Jain Irrigation has gained roughly 8% this year while Astral Poly has jumped 80% and Finolex has climbed about 40% on the BSE, stock-exchange data showed.
Separately on Wednesday, IT firm Newgen Software Technologies Ltd also filed its draft proposal with SEBI for an IPO.
Here’s a snapshot of the proposed IPOs by Prince Pipes and Newgen Software:
Prince Pipes
Issue:
The IPO is worth Rs 700 crore. The company will issue fresh shares worth Rs 500 besides a secondary market sale by promoter Chedda family.
Use of proceeds:
The firm will use the net proceeds of the issue for repayment and advance payment of outstanding loans, besides financing the project cost towards for setting up a manufacturing facility, upgrading equipment at its existing manufacturing facilities and for general corporate purposes.
The proceeds of the secondary sale will go to existing shareholders.
Bankers:
The company has hired JM Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd as merchant bankers to manage the
IPO.
Lawyers:
The company has appointed Luthra & Luthra Law Offices as its legal counsel. The merchant bankers have appointed AZB & Partners and Duane Morris & Selvam LLP as their Indian and international legal counsel, respectively.
Company:
The company is among the leading makers and distributors of polymer pipes and fittings in India. It sells its products under two brand names—Prince Piping Systems and Trubore Piping Systems.
The company claims it is positioned as an end-to-end polymer piping systems solution provider with more than 30 years of experience in manufacturing polymer pipes and more than 20 years of experience in manufacturing fittings.
It makes pipes under four varieties such as UPVC, CPVC, PPR and PP. The firm had a product range of more than 7,500 SKUs as on 31 August 2017.
Its products are used in plumbing, irrigation and sewage disposal for urban as well as rural markets.
The company has five manufacturing plants in locations like Athal and Dadra (Union Territory of Dadra and Nagar Haveli), Haridwar (Uttarakhand), Chennai (Tamil Nadu) and Kolhapur (Maharashtra).
The total installed capacity of its five existing plants was 210,646 tonnes per annum as on 31 August 2017.
The company plans to set up two new manufacturing plants—one in Jobner (Rajasthan) and another in Sangareddy (Telangana).
The company operates and sells its products through 766 distributors spread across India as on 31 August 2017.
Financials:
The firm reported a net profit of Rs 74.36 crore for FY2016-17 on total revenues (from operations) of Rs 1,262.58 crore.
Its revenues stood at Rs 1,008.98 crore in FY2015-16 and Rs 957.19 crore in the year before. The company’s net profit stood at Rs 29.36 crore in FY2015-16 and Rs 15.68 crore in FY2014-15.
Its revenues grew at a compounded rate of 14.85% from 2015 to 2017, while its net profit rose at the rate of 117.77%.
Newgen Software
Issue:
The company will issue fresh shares worth Rs 95 crore. In addition, venture capital investors will sell 13.45 million shares. Existing VCs such as Ascent Capital and IDG Ventures will sell a major chunk of their holding while Vistra ITCL and SAP Ventures will fully exit their four- and 10-year investments, respectively.
Use of proceeds:
The company will use the net proceeds from the fresh issue towards purchase and furnishing of office premises in Noida besides using the balance amount for general corporate purposes.
The proceeds of the secondary sale will go to existing shareholders.
Bankers:
ICICI Securities, Jefferies India and IDFC Bank are merchant bankers managing the IPO.
Lawyers:
Shardul Amarchand Mangaldas & Co is the legal counsel representing the company.
Venture capital firms selling shareholders have appointed ALMT Legal as their legal counsel.
Khaitan & Co and Herbert Smith Freehills LLP are Indian and international legal counsels representing the merchant bankers.
Company:
Newgen Software offers a software platform that enables its customers to develop applications for their businesses. The platform comprises an enterprise content management system that can digitise content and information, business process management and customer communication management.
It earns revenues from multiple streams such as sale of software products, annuity-based revenues from various fees such as SaaS subscription fees, annual technical and annual maintenance charges, and allied support. It also earns revenues from sale of services.
The company had over 450 active customers in over 60 countries as on 30 June 2017.
Its key clients include ICICI Bank, Trafigura, Bajaj Electricals, United Arab Bank, National Commercial Bank Jamaica, Axis Bank, Yes Bank, Kotak Mahindra Bank, Bank Islam Brunei Darussalam, Philippines Resource Saving Bank, ICICI Prudential Life Insurance, Reliance General Insurance, Max Life Insurance and Shriram Transport Finance.
The firm claims its enterprise-wide, mission-critical solutions have been used by some of the leading global businesses in various sectors including banking, government/PSUs, BPO/IT, insurance and healthcare.
Financials:
The company reported consolidated revenues of Rs 433.76 crore and an operating profit of Rs 52.36 crore in FY2016-17.
Its total revenues stood at Rs 349.67 crore in FY2015-16 and Rs 316.21 crore in the year before. Its net profit grew to Rs 27.8 crore in FY2015-16 and Rs 46.3 crore in the year before.
