HPL Electric & Power has filed its red herring prospectus (RHP) with capital market regulator SEBI. In its prospectus, the company said it will launch the IPO on 22 September and the same will remain open for subscription through 26 September. Price band for the IPO has been fixed at INR175-202 per share. The company plans to raise INR361 crore (INR3.61 billion) by issuing new shares. This figure is less than the INR450 crore (INR4.5 billion) the company said it will raise at the time of filing draft prospectus in February this year.
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HPL Electric IPO – Use of funds
The Delhi-based electric equipment manufacturing company plans to use INR130 crore (INR1.3 billion) for repayment of debt while INR180 crore (INR1.8 billion) will be used towards working capital requirements. Earlier, the company was planning to raise INR242.7 crore (INR2.42 billion) for funding working capital requirements. Remaining funds will be used towards general corporate purposes. HPL Electric IPO will be managed by SBI Capital Markets, ICICI Securities and IDFC Bank.
HPL ≠ Havell’s
HPL Electric & Power is not to be confused with Qimat Rai Gupta’s Havells India Limited which is already listed on Indian stock exchanges. HPL India Limited, Havells Electronics Private Limited, and Havell’s Private Limited hold equity stake in HPL Electric & Power and none of these companies are associated with Havells India Limited. In fact, the two groups have been involved in trademark litigation over the use of Havell’s name.
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HPL Electric & Power is a manufacturer of electric equipment such as meters, switchgears, lighting equipment and wires & cables. The company has six manufacturing facilities in Haryana and Himachal Pradesh with in-house testing capabilities.
In the year ended March 2016, the company posted a 6.6% growth in consolidated revenues to INR1,121.2 crore (INR11.2 billion) while net profit after tax moved up 5.7% to INR36.6 crore (INR366.1 million). According to the draft prospectus, around 48% of HPL’s revenues were generated from metering solutions while switchgears accounted for 19% in FY2015. Another 27% came from lighting equipment in FY2015 while the rest was contributed by other businesses such as wires & cables and railway electrification. Going forward, HPL Electric sees the government’s smart cities and affordable housing projects are major opportunities.