Bhopal-based medium-sized construction company Dilip Buildcon Ltd has received approval from the capital markets regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO).
The company had refiled its draft red herring prospectus (DRHP) with SEBI last month and cut the size of a fresh issue of shares as well as the quantum of shares offered for sale by its existing private equity backer BanyanTree Growth Capital.
The infrastructure firm is now looking to raise Rs 430 crore (approximately $63 million) through a fresh issue of shares in its IPO against the previous proposal where it sought to raise up to Rs 650 crore (then $104 million).
The offer comprises a fresh issue of 1.13 million equity shares held by its promoters Dilip Suryavanshi and Devendra Jain, and private equity fund BanyanTree Growth Capital.
Dilip Buildcon had previously filed documents with SEBI in April last year. Its existing investor BanyanTree Growth Capital was looking for a complete exit. Now, it has reduced the number of shares on offer to 7.95 million equity shares against 11.4 million equity shares or entire 9.75 per cent stake it offered to divest earlier.
BanyanTree Growth Capital had invested Rs 75 crore to buy just under 10 per cent stake in the firm.
The proceeds of the issue will be used for repayment and pre-payment of certain portion of term loans to meet working capital requirements and other corporate purposes.
Incorporated in 1988, Dilip Buildcon provides engineering, procurement and construction services in India.
The Bhopal-based firm mainly undertakes construction projects in the roads and irrigation sectors across India. The company specialises in constructing state and national highways, city roads, culverts and bridges.
The business comprises construction, under which it undertakes roads, irrigation and urban development projects on an EPC basis; and infrastructure development business, under which it undertakes building, operation and development of road projects on a BOT basis with a focus on annuity projects.
Axis Capital Ltd, IIFL Holdings, JM Financial Institutional Securities and PNB Investment Services are the book running lead managers to the issue. The shares are proposed to be listed on BSE and NSE.