Capital market regulator SEBI has issued final observation for the initial public offering (IPO) of Pennar Engineered Building Systems Limited. SEBI observation amounts to approval for companies to bring their IPOs. Final observations by the market regulator were issued on 10 July in this regard.
Pennar Engineered Buildings Systems Ltd, a subsidiary of Hyderabad-based Pennar Industries Ltd, had filed draft red herring prospectus (DRHP) with SEBI on 27 March 2015 through Motilal Oswal Investment Advisors Private Limited. In its prospectus, the company said it planned to raise INR58 crore through the sale of new shares. In addition, existing investors plan to sell 55.16 lakh shares through an offer for sale (OFS). The issue will be managed by Motilal Oswal Investment Advisors Private Limited, Axis Capital Limited, and Karvy Investor Services Limited.
Use of funds
Majority of the proceeds will be used towards pre-payment of loans availed by the company while the rest will go towards infrastructure including software and hardware and general corporate purposes. Pennar Engineered Buildings Systems plans to spend INR34 crore in debt repayment of working capital facilities while infrastructure spend for expansion of design and engineered services is estimated at INR8 crore. This leaves INR16 crore for general corporate purposes.
Selling Shareholders
Private equity player Zephyr Peacock is an investor in Pennar Engineered Buildings Systems and it intends to sell its entire shareholding of 50.16 lakh shares through the IPO. Zephyr Peacock holds 18.13% equity stake in the company through two funds. In addition, Usha Ramani Potluri and Vikram Chachra plan to offload 2 lakh shares each while Eight Finance Private Limited will offer 1 lakh shares in the OFS.
With the latest approval, India’s IPO pipeline now swells to 20. Apart from these 20 companies allowed by SEBI to bring IPOs, several players have recently filed prospectus with the regulator. These includes some prominent names like Café Coffee Day’s parent Coffee Day Enterprises Limited (CDEL), staffing firm Quess Corporation, realtor Paranjape Schemes, telecom infrastructure player Viom Networks, and IndiGo parent InterGlobe Aviation Limited.
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