Aakash Educational Services Ltd, which provides coaching services for medical and engineering entrance examinations, and Century Metal Recycling Ltd have received regulatory nod to float their initial public offerings (IPO).
The Securities and Exchange Board of India issued its final observations on the two companies’ IPO proposals on 28 September, the capital markets regulator’s website shows.
This takes the total number of companies that have received SEBI approval for IPOs this year to at least 50. Last year, 46 companies had received SEBI clearance for IPOs.
Aakash had filed its draft IPO proposal on 19 July. The IPO size is estimated to be around Rs 1,000 crore ($145 million at current exchange rates), three people in the know had told VCCircle previously. This would make it the largest-ever IPO in India’s education sector.
The public issue is an offer for sale by the company’s promoters and their family members. The IPO will result in a stake dilution of 27.76% on a post-issue basis.
All proceeds from the offer will go to the selling shareholders. The company will not receive any proceeds directly.
Kotak Mahindra Capital Co, Citigroup Global Markets India, and CLSA India are the merchant bankers managing the IPO.
Aakash Educational Services was incorporated in October 2007 and has become the largest player in India’s education coaching industry by revenue. Its offerings can be categorised under three brands – Aakash Medical, Aakash IIT-JEE and Aakash Foundations.
The company reported a net profit of Rs 160.18 crore for the financial year 2017-18 on revenue of Rs 973.33 crore.
The recycler of aluminium and zinc alloys had filed its IPO proposal with the regulator on 12 June. The IPO size is estimated at Rs 650-700 crore (around $97-104 million), people in the know told VCCircle previously.
The public issue comprises a fresh issue of shares worth Rs 150 crore and a sale of 6.4 million shares by promoters and existing shareholders.
The company will use Rs 125 crore of the net fresh proceeds to repay debt. It will use an undisclosed amount towards general corporate purposes.
Century Metals does not have a listed peer with a comparable business portfolio. An IPO and market listing will make the New Delhi-based company first in its sector to go public.
ICICI Securities and Edelweiss Financial Services Ltd are managing the IPO.
Century Metals was incorporated in July 1994 and claims to be India’s largest producer of recycled aluminium. The company processes aluminium-based metal scrap to make aluminium alloys and sells those either in the form of molten alloy or in solid ingots.
It reported consolidated net profit of Rs 70.54 crore for the nine months ended December 2017 on consolidated revenue from operations of Rs 1,815.46 crore.