Automobile and industrial parts maker Craftsman Automation Pvt. Ltd has received a green signal from the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) that will see two private equity investors exit partially.
The firm had filed its draft prospectus with SEBI in June. Standard Chartered Private Equity and International Finance Corporation (IFC), World Bank’s private-sector investment arm, are the two PE backers of the company.
Coimbatore, Tamil Nadu-based Craftsman’s public issue will comprise of fresh shares worth Rs 400 crore and investors' 4.83 million shares.
Standard Chartered Private Equity has offered to sell 1.55 million shares, while IFC will sell 1.41 million shares in the IPO that will also see the company’s promoter Srinivasan Ravi sell a small chunk of his holding.
The IPO size is estimated at Rs 800 crore, according to people in the know.
VCCircle had reported in March that Craftsman was close to filing its draft prospectus.
According to a recent report by credit rating agency CRISIL, Standard Chartered Private Equity and IFC hold a 15.5% and a 14.05% stake in Craftsman, respectively.
In 2010, IFC had pumped in $10 million in Craftsman Automation. Two years later, it made a follow-on investment of $18 million, along with Standard Chartered Private Equity.
For Standard Chartered Private Equity, the IPO would give its second exit in this calendar year as it offloaded its entire stake in Sterlite Power Grid Ventures Ltd in February.
In the case of IFC, this would be the second exit through a listing this calendar year as it sold part of its stake in Bandhan Bank via the bank’s public issue in March.
In April this year, IFC said it was planning to back Craftsman with debt funding of up to $30.7 million (Rs 200 crore).