The buzz in the IPO market is gradually coming back. After the mega FirstCry, its subsidiary, Swara Baby has filed its draft red herring prospectus (DRHP) with markets regulator SEBI as the company aims to raise Rs 1,000 crore. While the details pertaining to the share price band are yet to be known.
Here are the key highlights of the issue as available from the DRHP
#1 Swara Baby IPO: Issue size and BRLM
According to the DRHP, Swara Baby’s IPO is a book-build issue comprising issuance of fresh equity worth Rs 500 crore and includes an offer for sale (OFS) component aggregating to Rs 500 crore.
Through the OFS route, Swara Baby’s parent company, Brainsbees Solution will offload its 24.55% stake in firm aggregating to Rs 300 crore, while the company’s promoter Anadya Bon Merchari LLP, will sell shares worth Rs 200 crore transferring 2.13% of its stake. Each share has a face value of Rs 2.
The issue is being managed by JM Financial and Avendus Capital, while MUFC Intime India is the registrar to the offer.
#2 Swara Baby IPO: Utilization of proceeds
The Madhya Pradesh headquartered company will utilize capital worth Rs 198.2 crore as a means to partially finance its project, while Rs 100 crore will be deployed towards re-payment and pre-payment of certain borrowings availed by the company.
The company will use Rs 27.5 crore for investment in its subsidiaries like Solis Hygiene, Swara Hygiene and KAEHPL. The amount will also be used to pay the debt availed by the subsidiaries. The remaining proceeds will be deployed towards funding the company’s growth, acquisition initiatives and other general corporate purposes.
#3 Swara Baby IPO: Key risks
Risks pertaining to regional concentration in Madhya Pradesh, reliance for revenue generation from a limited number of clients, customer concentration , limited number of suppliers, high competition from international and domestic clients need to be monitored.
Company’s revenue and business operations could also be adversely affected over risk of price pressure, capital expenditure, and statutory and licensing requirements need to be watched out for.
