Sequoia Capital-backed kitchen appliances maker Stove Kraft Ltd has refiled its draft prospectus with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).
The company plans to raise Rs 145 crore ($20.35 million) by selling fresh shares while its promoters and venture capital investor Sequoia will sell 7.16 million shares in the IPO.
The company had originally filed its draft red herring prospectus in September 2018 and received regulatory approval in January 2019. SEBI’s IPO approval is valid for one year, and Stove Kraft’s application lapsed in January this year. The company hasn't changed the IPO size in the new prospectus.
Edelweiss Financial Services and JM Financial are merchant bankers managing the IPO.
Through Stove Kraft’s IPO, venture capital and growth equity investment firm Sequoia is looking to sell its entire stake in the company. Sequoia had invested in the Bengaluru-based company in two tranches, with the initial investment deal in 2010. Sequoia invested a total of Rs 110 crore in 2010 and topped it up three years later. It owns a stake of around 25.37% in the company.
Stove Kraft’s total IPO size is estimated at Rs 450-500 crore, a person in the know said. The IPO may result in roughly 35-36% stake dilution and could value the company around Rs 1,400 crore, VCCircle estimates show.
A successful IPO and listing will see Stove Kraft join listed peers such as TTK Prestige, Butterfly Gandhimati, and Hawkins. While TTK Prestige commands a market value of Rs 8,128.46 crore, Stove Kraft is of the same size in terms of business as Hawkins and Butterfly Gandhimati.
Hawkins has a market capitalisation of Rs 2,472.05 crore, while Butterfly Gandhimati commands a market value of Rs 386.65 crore, stock exchange data showed.
Stove Kraft, which was launched in 1999, primarily offers hobs, cooktops, non-stick cookware, LPG gas stoves, chimneys and induction cooktops under Pigeon and Gilma brands.
It sells stoves and other small kitchen appliances under Pigeon and Gilma brands. The firm is also planning to start manufacturing of kitchen products under the Black + Decker brand, for which it already has a licensing agreement.
The company, which has 429 distributors in more than 24 states across the country, runs one factory each in Bengaluru and Baddi in Himachal Pradesh.
Pigeon-branded products contributed 81.61% to the overall sales. Gilma-branded and Black + Decker products contributed 4.74% and 0.88% to sales, as of 31 August 2018.
In October 2019, Stove Kraft appointed Rajiv Mehta as the new chief executive officer with an aim to increase its growth in the cookware and appliance market.
Mehta has previously worked with athletic and sports goods brand Puma besides being the CEO of Arvind Fashion Brands Ltd and Arvind Sports Lifestyle Ltd as well.
Prior to his appointment, Mehta was functioning as an independent director at Stove Kraft since June 2018.