Pennar Engineered Building Systems Ltd (PEBS), a subsidiary of Hyderabad-based Pennar Industries Ltd, has fixed the price band for its initial public offer (IPO) at Rs 170-178 a share.
The issue, that will open on August 25 and close on August 27, 2015, will raise up to Rs 58 crore (around $9.2 million) for the company. In addition, there is an offer for sale of 5.51 million equity shares by private equity firm focused on small and medium enterprises Zephyr Peacock besides a small stake to be sold by promoter group and special situations investor Eight Capital and its managing partner Vikram Chachra.
The selling shareholders will pocket as much as Rs 98 crore of which Rs 90 crore will go to Zephyr Peacock.
The PE firm will almost triple the value of its investment in its two-year-old investment. It 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 little over half of its holding.
From the proceeds of the fresh issue of shares, PEBS will 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.
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.
The firm has one manufacturing facility located at Anakapalli in Medak district in the new state of Telangana which as a production capacity of 90,000 MT per annum of fabricated structural metal products a year.
The issue is being managed by Motilal Oswal, Axis Capital and Karvy.