Kitchen appliance maker Stove Kraft files IPO prospectus


Stove Kraft Limited – the company behind successful kitchen appliance names such as Pigeon and Gilma – has filed draft prospectus with SEBI, seeking permission to launch IPO. The company’s product range includes pressure cookers, non-stick cookware, gas and induction cooktops, mixer-grinders and chimneys. Stove Kraft IPO will facilitate a partial exit to its investors.

Stove Kraft IPO: Fresh + OFS, Sequoia to pare stake

The company plans to raise fresh shares worth up to INR145 crore (INR1.45 billion) which will be used towards paying certain borrowing and for other general corporate purposes.

Stove Kraft IPO will also include an offer of sale (OFS) for up to 7,163,721 shares by existing shareholders including company promoters Rajendra Gandhi, Sunita Rajendra Gandhi and private equity investor Sequoia. While Rajendra Gandhi and Sunita Rajendra Gandhi plan to sell 640,906 and 250,000 shares, respectively; the biggest chunk of shares will be offered by SCI Growth Investments II (4,961,610 shares) and Sequoia Capital India Growth Investment Holdings I (SCI-GIH, 1,311,205 shares).

Stove Kraft IPO: Established brand

The company is one of the dominant players for pressure cookers and a market leader in free standing hobs and cooktops. Pigeon is the most visible brand of the company and it contributed 86.89% of Stove Kraft’s sales in FY2018 while the Gilma brand contributed 4.74% of its overall sales. The company has expanded into the LED lighting market with its Pigeon brand, selling LED products for both domestic and commercial applications.

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In addition to established presence in the value and semi-premium segments through the two brands, Stove Kraft also entered the premium segment in 2016 following a brand licensing agreement to use BLACK + DECKER brand. Nevertheless, the company is yet to commence manufacturing under the BLACK + DECKER brand.

Stove Kraft manufactures its products at its backward integrated manufacturing facilities at Bengaluru (Karnataka) and Baddi (Himachal Pradesh). As of 31 March 2018, it had an installed annual production capacity of 15 million units, with the capability to manufacture products in the pressure cookers, non-stick cookware (roller coated and spray coated), LPG stoves, mixer grinders and induction cooktops categories.

Stove Kraft IPO: Brand recall not translating in profits

As an old and well-established brand, Pigeon resonates with buyers in its key markets. However, this isn’t helping the company much as sales revenues have remained in a narrow range of INR506.5 crore to INR534.6 crore in the last five years. There isn’t any relief on the profitability front as well as the company hasn’t posted a profit in any of these years, although losses have also been contained in a range.

Stove Kraft’s consolidated financial performance (in INR crore)

FY2014 FY2015 FY2016 FY2017 FY2018
Total revenue 515.0 506.5 524.8 518.0 534.6
Total expenses 543.6 517.4 568.2 536.9 547.9
Profit after tax -30.0 -12.1 -43.3 -19.1 -12.5


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