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The IPO of Ahmednagar-based Prabhat Dairy will open on 28 August, marking the 14th IPO in India this year. Price band of the IPO has been fixed at INR140-147 per share. The company plans to raise INR300 crore (USD46.7 million) through fresh issue of equity shares. In addition, existing investors plan to sell 1.47 crore shares through an offer for sale (OFS).
The issue will be managed by Edelweiss Financial Services Limited, Macquarie Capital Securities (India) Private, and SBI Capital Markets Limited. The company filed its draft red herring prospectus (DRHP) with market regulator SEBI on 31 March 2015 and received the approval in 69 days, including weekends and holidays.
Depending on the bidding process, Prabhat Dairy IPO will mobilize funds between INR505.8 crore and 516.1 crore. Majority of the proceeds will be used towards part pre-payment of loans availed by the company and its wholly owned subsidiary SAIPL while the rest will be invested in capital expenditure and general corporate purposes. The dairy company plans to spend INR185 crore in debt repayment while another INR35 crore will go towards capital expenditure including construction of a 3 MW cogeneration captive power plant and enhancing automation of manufacturing processes at its facilities.
Among the existing investors, Rabobank and Proparco will be partly offloading their shareholding through the offering.
Prabhat Dairy’s net revenues in FY 2015 increased 12% to INR874.87 crore while profit jumped 53% to INR3.89 crore from previous FY.
The public offer of Prabhat Dairy will follow three IPOs next week. These include Navkar Corporation, Pennar Engineered Buildings Systems, and Shree Pushkar Chemicals & Fertilisers. The string of IPOs marks the revival in India’s primary market after a dry patch in the last couple of years. The biggest of the IPOs so far in the year was Inox Wind which raised INR1020.5 crore while the smallest will be Shree Pushkar Chemicals & Fertilisers, raising only INR70 crore. According to research by IPO Central, the 10 IPOs have raised a combined sum of INR4,672.3 crore while several big names remain in pipeline.
We intend to analyze the IPO in greater depth next week. Keep checking IPOCentral for latest updates regarding this IPO, or simply follow us on Twitter and Facebook or subscribe to our weekly newsletter on the right sidebar.