Studds Accessories Ltd, the world’s largest maker of two-wheeler helmets by sales volume, has received regulatory nod to float an initial public offering.
The Securities and Exchange Board of India (SEBI) issued final observations to Studds’ IPO proposal on 14 December, the regulator's website shows. With this, SEBI has approved 71 IPO proposals so far in 2018. Last year, it had cleared 46 IPO proposals.
Studds had filed its draft IPO prospectus on 27 August, seeking an estimated valuation of Rs 1,850 crore.
The proposed IPO comprises a sale of fresh shares worth Rs 98 crore and a secondary sale of 3.93 million shares by the promoter.
The IPO size is estimated at Rs 400-450 crore, people in the know told VCCircle. It may result in a stake dilution of roughly 24.5%.
Faridabad, Haryana-based Studds, which was established in 1975 and incorporated in 1983, could become the first company in the sector to go public.
The company plans to use Rs 83 crore to part-finance the construction of two factories. It also plans to use some money for general corporate purposes.
Edelweiss Financial Services and IIFL Holdings are the merchant bankers managing the IPO.
Founded by Madhu Bhushan Khurana, Studds is the largest-selling two-wheeler helmet brand in India by volume. It also sells its product under the ‘Studds’ brand in 21 countries.
Studds says it accounted for more than 25% market share in the two-wheeler helmet industry in India in the financial year 2017-18.
In 2016, it launched a premium helmet brand ‘SMK’, which the company claims has emerged as the leading brand with the largest market share in the premium two-wheeler helmet segment in India in terms of volume.
In addition, the company makes two-wheeler lifestyle accessories such as luggage, gloves, helmet security guards, rain suits and eyewear.
It counts two-wheeler makers such as Hero Motocorp Ltd, Suzuki Motorcycle India Pvt. Ltd and UM Lohia Two Wheelers Pvt. Ltd as clients, having entered into agreements to supply helmets and two-wheeler lifestyle accessories.