Sleepwell mattress maker raises $22 mn in anchor allotment from PremjiInvest, others

Sheela Foam Ltd, which sells its products under the brand Sleepwell, has raised Rs 153 crore ($22 million) from anchor investors a day ahead of opening its initial public offering (IPO), it said on Monday.

Wipro chairman Azim Premji’s private investment firm PremjiInvest among several mutual funds and other institutional investors came on board as part of the anchor allotment.

The anchor investors picked shares at the upper end of the band of Rs 680-730 a share at which the Ghaziabad-headquartered Sheela Foam is going ahead with the IPO.

PremjiInvest, which also came as an anchor investor in few other IPOs including that of RBL Bank and Equitas early this year, committed Rs 14 crore as part of the anchor allotment.

Sheela Foam is seeking a valuation of as much as Rs 3561.14 crore (roughly $520 million) through the IPO that opens on 29 November.

The second IPO after the government kicked off demonetisation of higher denomination currency early this month, will close on 1 December. 

GreenSignal Bio Pharma, which was aiming to raise Rs 116 crore (which was later trimmed to Rs 110 crore) in its IPO, last week withdrew the public issue after failing to garner sufficient bids from institutional investors, as it bore the brunt of stock-market volatility after the government announced demonetisation.

However, Sheela Foam and the merchant banks leading the issue believe the impact of demonetisation will be muted in its case though the valuation could have been slightly higher. 

The issue could have been priced higher if not for the government notification to de-legalise Rs 500 and Rs 1,000 notes, Rahul Gautam, managing director of Sheela Foam, said last week.

The issue entirely comprises an offer for sale by one of the promoter companies Polyflex Marketing Pvt Ltd and the firm shall not get any money from the IPO. The overall issue is worth Rs 510 crore ($77 million). Post the issue, the Gautam family is likely to retain around 86% stake in the entity.

With the anchor allotment, the IPO size would shrink to around Rs 363 crore.

Sheela Foam filed its IPO proposal with the Securities and Exchange Board of India (SEBI) on 29 July. The company received regulatory clearance for the proposed IPO on 2 November.

It is one of the few private firms that are looking to go public and are not already backed by a private equity investor.

Edelweiss Financial Services Ltd and ICICI Securities Ltd are the merchant bankers for the IPO.

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