Prince Pipes and Fittings Ltd, a maker of PVC pipes for plumbing, irrigation and sewage works, has received regulatory approval for its revised initial public offering (IPO) proposal.
The Securities and Exchange Board of India (SEBI) issued final observations to Prince Pipes’ revised proposal on 28 December 2018, the capital markets regulator's website shows. With this, SEBI approved 71 IPO proposals in 2018. In 2017, it had cleared 46 IPO proposals.
Prince Pipes had originally filed its draft red herring prospectus (DRHP) in September 2017. It had received regulatory approval for this proposal on 3 November 2017.
In October 2018, the company filed a revised DRHP and cut its offer size.
Under the revised offering, the company’s IPO size is estimated at Rs 600 crore ($81.5 million then) as compared with the original plan to raise Rs 700 crore ($106.5 million then).
The company plans to issue fresh shares worth Rs 400 crore while the promoter Chedda family will sell shares for the remaining amount.
Prince Pipes is among four dozen firms that have queued up to float an IPO. These companies are waiting on the sidelines as a combination of macro-economic factors and global events have caused a sharp decline in the stock market of late, leading to uncertainty in valuations.
Listed peer companies in the segment such as Astral Poly Technik, Jain Irrigation and Finolex Industries have seen their market value erode of late.
JM Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd are the merchant bankers managing Prince Pipes’ share sale.
The company plans to use Rs 100 crore of the fresh net proceeds to repay or make advance payment of outstanding loans. It also plans to use Rs 181 crore to finance a new factory, Rs 76.5 crore to upgrade equipment at its existing factories and an undisclosed amount toward general corporate purposes.
Prince Pipes is among the leading makers and distributors of polymer pipes and fittings in India. It sells its products under two brand names—Prince Piping Systems and Trubore Piping Systems.
The company claims it is positioned as an end-to-end polymer piping systems solution provider with more than 30 years of experience in manufacturing polymer pipes and more than 20 years of experience in manufacturing fittings. It has a product range of nearly 7,500 stock keeping units. The company sells its products through 843 distributors across India.
Prince Pipes has five factories, at Athal and Dadra (Union Territory of Dadra and Nagar Haveli) and in Haridwar (Uttarakhand), Chennai (Tamil Nadu) and Kolhapur (Maharashtra). The total installed capacity of these five plants was 242,916 tonnes a year. It plans to set up two new factories—one at Jobner (Rajasthan) and another at Sangareddy (Telangana).