Pennar Engineered Buildings Systems Ltd, a subsidiary of Hyderabad-based Pennar Industries Ltd, has filed its draft red herring prospectus (DRHP) with securities market regulator SEBI to float its initial public offer (IPO).
The proposed public issue comprises fresh issue of equity shares to raise up to Rs 58 crore (approximately $9.2 million), besides an offer for sale which would lead to part-exit for its private equity investor Zephyr Peacock.
This would make it the fifth PE-backed firm to file documents for an IPO this year. Several others have filed their prospectus late last year.
The galloping share prices in the secondary market have triggered a rush of companies filing documents to go public. Majority of these firms are PE-backed and in several of them the investor is looking to exit or part-exit in the public issue.
Here's a snapshot of the IPO
* IPO comprises fresh issue of shares to raise up to Rs 58 crore (around $9.2 million) in addition to an offer for sale of 5.51 million equity shares by Zephyr Peacock, the private equity firm focused on small and medium enterprises, Usha Ramani Potluri, Vikram Chachra and Eight Finance Pvt Ltd.
* Bankers: Motilal Oswal, Axis Capital and Karvy.
Use of proceeds
* Of the proceeds of the fresh issue worth Rs 58 crore, it would use Rs 34 crore for repaying debt, about Rs 8 crore for financing the procurement of infrastructure for its design and engineering services, while the remaining would be used for general corporate purposes.
Company
* Incorporated in 2008, PEBS delivers engineered steel building solutions for commercial, industrial, logistics, aviation, agriculture, sports stadia and other sectors.
* It provides design, manufacture, supply and installation of custom designed steel building systems and building components.
* PEBS is part of the Pennar Group of Companies which consists of Pennar Industries, Pennar Chemicals and Saven Technologies.
* It has one manufacturing facility located at Anakapalli in Medak district in the new state of Telangana.
* The facility has a production capacity of 90,000 MT per annum of fabricated structural metal products a year.
* The company has a non-exclusive technical know-how licensing arrangement with the US-based NCI Group, Inc for supply of standing seam roofing panel system in India under the brand name ‘Double Lok’.
Financials
* For the financial year ended March 31, 2014, the company posted net revenue of Rs 364.33 crore against Rs 287 crore in FY13. Its net profit rose from Rs 14.76 crore to Rs 18.18 crore in the same period. However, its profitability was affected in the current financial year. In the first eight months of this year ended November 30, 2014, it registered net revenues of Rs 235.4 crore with a net profit of Rs 4.16 crore.
Investor
* Private equity firm Zephyr Peacock had invested Rs 50 crore ($9.16 million then) in the company in April 2013, a third of which was through stake purchase from the promoters. It is now selling a part of its holding.
Post the offer-for-sale, it would continue to hold around 3 million convertible preference shares.
(Edited by Joby Puthuparampil Johnson)
