Noida-based Vectus Industries is gearing up to launch its maiden public offer. The manufacturer of plastic storage tanks and pipes is soon expected to file its draft prospectus for INR500 crore (INR5 billion) initial public offering (IPO). Vectus Industries IPO funds will be used for capital expenditure and working capital requirements. Although merchant bankers for the IPO are yet to be finalised, the company is believed to be eyeing a valuation of around INR2,500 crore.
Vectus Industries IPO will offer an exit route to private equity firm Creador which invested nearly INR100 crore in the former in June 2014 for a minority stake. According to filings made with the Registrar of Companies (RoC), Creador had 21.65% equity stake in the company as of 31 March 2017. The PE firm will be looking to partially offload some shares in the IPO though an Offer For Sale (OFS).
Vectus Industries, established by Ashish Baheti and Atul Ladha in 2004, is a manufacturer of plastic storage tanks and pipes. It sells water storage tanks under Vectus, Gangotri, Ganga and Waterwell brands while also offering PVC, CPVC and composite pipes and fittings under the Vectus brand.
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According to its website, Vectus Industries has a nationwide distribution network of more than 3,500 dealers, more than 10,000 retail counters, 14 manufacturing plants and 9 depots.
It is among the fastest growing players in the industry and claims to have posted an average growth rate of 23% in revenues between FY2012 and FY2018. For the financial year (FY) 2016/17, the company posted annual revenues of INR532.7 crore, showing a growth of nearly 6.2% from previous year. Nevertheless, its profits grew at a healthy rate of 19.7% to INR24.9 crore in FY2017.