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Prataap Snacks IPO About To Hit The Market
Sequoia Capital-backed Prataap Snacks Pvt. Ltd sells potato
chips and a variety of spicy Indian savouries under the brand
name Yellow Diamond. It is eyeing an initial public offering
(IPO) that could see the firm raise approximately Rs.400-500
crore.
The Madhya Pradesh-based snacks maker is the new one
getting ready for an initial share sale. The discussions have
been in progress for some time; they have planned to hire
merchant bankers very soon to initiate work on the IPO. The IPO will be a combination of
primary offer and an offer for sale from Sequoia, which sought to sell part of its stake in
the Indore-based snack-maker. Last March, Sequoia Capital-backed snacks-maker was
looking to raise $50-70 million from private equity investors in order to fund its expansion
plans.
As of now, more than 25 firms have filed their draft red herring prospectuses (DRHP) with
the regulator. With its IPO plans, Prataap clubs with another snacks-maker, Balaji Wafers,
which is also devised plans to go public. In January, it was reported that Gujarat-based
Balaji Wafers Pvt. Ltd will sell a 10 per cent stake via an IPO.
Prataap Snacks' issue would constitute fresh equity as well as offer for sale by some of the
current shareholders. Through the fresh equity issuance, the company has planned to raise
around Rs. 250 crore, according to the draft red herring prospectus. Approximately, 29.82
lakh shares would be on offer via an offer for sale (OFS) and would include sale of around
1.74 lakh shares by SCI Growth Investments II, Sequoia Capital GFIV Mauritius & by
some promoter group entities. As per sources, the total IPO size is seen to be more than
Rs. 400 crore.
The proceeds from the IPO would be used for funding capital expenditure requirements,
repayment of borrowings, modernization of current manufacturing facilities, marketing
and brand building activities. As per the company’s filings with the registrar of companies,
Prataap Snacks’ revenue shot up 30 per cent in the financial year 2014 to Rs.446.9 crore
from Rs.344.3 crore in the previous financial year. The extruded snacks division donated
Rs.211.9 crore to revenue, the highest, followed by the potato chips division with Rs.166.9
crore.
They are also aided by the fact that the sector of processed foods has strong growth
capacity in India. Overall consumption of processed foods is rising. While in the US
around 80per cent of the food consumed is processed, in India the number stands at just 2-
3per cent. The demand for snacks has shown considerable growth exponentially in the
country. The Indian snacks industry got enlarged nearly six times to Rs.47,000 crore in
2013 from Rs.8,000 crore in 2004.
Lately, many companies have filed their draft papers for IPOs which include include
Avenue Supermarts, Security and Intelligence Services, Shankara Building Products and
BSE.
To know about the Shankara Building Products IPO, Click “Shankara BuildPro files for
Rs 400-450-crore IPO”.
Disclaimer The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of the research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making investment decision. Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on for certain operational deviations. Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/ Research Analyst/ his Relative:
Do not have any financial interest / any actual/beneficial ownership in the subject company. Do not have any other material conflict of interest at the time of publication of the research report Have not received any compensation from the subject company in the past twelve months Have not managed or co-managed public offering of securities for the subject company. Have not received any compensation for brokerage services or any products / services or any compensation or other benefits from
the subject company, nor engaged in market making activity for the subject company Have not served as an officer, director or employee of the subject company
Article Written by Madhurima Chowdhuru