Sleepwell mattresses maker Sheela Foam to launch IPO on 29 November

Promoter Polyflex Marketing to sell a part of its holding through the IPO for an estimated Rs510 crore

The company has fixed a price band of Rs680-730 per share for the issue. The sale will end on 1 November.
The company has fixed a price band of Rs680-730 per share for the issue. The sale will end on 1 November.

Mumbai: Sheela Foam Ltd, the maker of the Sleepwell brand of mattresses, will launch its share sale on 29 November.

Polyflex Marketing Pvt. Ltd, the company that controls Sheela Foam, will sell a part of its holding through the initial public offering (IPO). The offer for sale will see the promoter entity sell shares worth Rs510 crore.

The company has fixed a price band of Rs680-730 per share for the issue. The sale will end on 1 November.

ICICI Securities Ltd and Edelweiss Financial Services Ltd are managing the share sale for Sheela Foam.

Mint reported on 10 November that Sheela Foam will sell shares to the public for the first time in November.

In addition to the Sleepwell brand, Sheela Foam, incorporated in 1971, also makes other foam-based home comfort products targeted primarily at Indian retail consumers, as well as technical grades of polyurethane foam (PU foam) for end-use in a wide range of industries. The Sleepwell brand was introduced in 1994.

The company’s home comfort line includes products such as mattresses, furniture-cushioning, pillows, cushions, sofa-cum-beds, as well as PU foam cores used for making finished home comfort products.

“Our technical foam business caters to various end-use industries such as foams for power generators, industrial filters, electronic packaging, shoe industry and helmets, among others,” said Rahul Gautam, managing director of Sheela Foam.

Technical foam contributes to 20% of the company’s business.

It also supplies foam to online furniture companies such PepperFry and UrbanLadder, he said.

According to Gautam, the mattress industry is expected to continue to grow strongly.

“Of the almost Rs9,000 crore mattress market, only about 30% or Rs3,000 crore is organized. The growth of the market will be driven by a growing movement of customer preference towards the organized market,” he said.

The implementation of the goods and services tax (GST) will also benefit the company, said Gautam.

“Today, our logistics is oriented state-wise because of tax reasons. However, with GST we will be able to reorganize the logistics to better serve our markets. GST will also create a level playing field for different mattress types,” he said.

Sheela Foam also has a presence in Australia, manufacturing PU foam through its subsidiary Joyce Foam Pty Ltd. It acquired the company in 2005.

In fiscal years 2014-15 and 2015-16, revenue from the sale of home comfort products aggregated to Rs916 crore and Rs1,016.4 crore, constituting 64.6% and 65.5%, respectively, of Sheela Foam’s total revenue for these years.

According to Crisil Ltd, based on revenues, Sleepwell branded mattresses constituted a share of around 20-23% of the organized Indian mattress market as of 2015-2016.

Sheela Foam has 11 manufacturing facilities in India and five in Australia. It has a nationwide network of more than 100 distributors and around 5,000 dealers. The company also exports its products to almost 25 countries, according to its website.

Sleepwell in India competes with other home-grown brands such as Kurlon Enterprise Ltd, Springfit, and Springwel Mattresses Pvt. Ltd.

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