Jacob Ballas-backed Crocodile branded apparel maker gets IPO nod

Coimbatore-based SP Apparels Ltd has received capital markets regulator Securities and Exchange Board of India (SEBI)’s approval for its proposed initial public offer (IPO). This could be the third portfolio firm of mid-market PE firm Jacob Ballas to go public in a little over a year.

Last year, two portfolio firms of the PE firm—theme park operator Adlabs Entertainment and infrastructure construction, development and management firm PNC Infratech—went public.

SP Apparels, which makes and retails menswear in India under the Crocodile brand, had filed its draft red herring prospectus (DRHP) with SEBI in December. It is looking to raise up to Rs 215 crore through a fresh issue of shares besides an offer for sale by Jacob Ballas that is looking to part-exit.

In November 2006, Jacob Ballas through New York Life Investment Management India Fund II had picked up a 10.71 per cent stake in SP Apparels for Rs 36 crore. At present, it owns a 10.5 per cent stake in SP Apparels and will sell around half of it in the IPO.

SP Apparels will also test the primary market appetite again for an apparel firm. In December 2014, another PE-backed firm Monte Carlo Fashions had floated its IPO. Monte Carlo, which generates much higher profits compared with SP Apparels, never managed to touch the IPO issue price after listing.

For 2014-15, SP Apparel's revenues rose to Rs 479 crore from Rs 452 crore in the previous year. Net profit increased to Rs 10 crore from Rs 6.6 crore. The company has been stuck at single-digit sales growth for the past four years while its net profit had shrunk in previous years before crossing the Rs 9.7 crore mark touched in FY12.

Motilal Oswal Investment Advisors and Centrum Capital are the bankers for SP Apparels’ issue.

For more details on the IPO, click here.

In a separate development, SEBI has also approved the proposed IPO of KPR Agrochem, a maker of crop protection products, including fertilisers.

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