Hyderabad-based power infrastructure service provider Power Mech Projects has received green signal from capital market regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offer (IPO).
Power Mech had filed its draft red herring prospectus (DRHP) with SEBI in October 2014.
As per the DRHP, the company will issue 4.27 million shares, including an offer for sale by Motilal Oswal Private Equity (PE) of around 2.14 million shares. It is raising over Rs 145 crore through the fresh issue and back-of-the envelope calculations show the overall issue size would be around Rs 300 crore. Of the total issue size, half will go to provide a partial exit to the PE investor (for our previous snapshot of the IPO, click here).
SEBI gave its approval to the IPO on March 9, 2015.
Motilal Oswal PE had invested Rs 40 crore in the company in tranches starting in 2009 and currently holds 19.89 per cent stake. It is selling over four-fifths of its holding in the IPO and will own 2.55 per cent stake after the issue.
Meanwhile, of the proceeds of the fresh issue, the company would use Rs 120 crore for funding working capital requirements and Rs 24.5 crore for repayment of debt.
Power Mech is into power infrastructure services and provides erection, testing and commissioning of boilers, turbines and generators and balance of plant works, civil works and operation and maintenance services.
Kotak Mahindra Capital, India Infoline and Motilal Oswal are managing the issue.
(Edited by Joby Puthuparampil Johnson)