Sheela Foam IPO sails through on last day
New Delhi: The initial public offering (IPO) of Sheela Foam Ltd, which got off to a slow start on Tuesday, comfortably sailed through by the time it closed on Thursday, receiving bids for five times the number of shares on offer.
Qualified institutional buyers (QIBs) bid for around 14.5 times the number of shares set apart for them, while high-net-worth individuals and corporates bid for around 3.35 times of their quota. However, retail investors’ portion was undersubscribed, receiving bids for only 41% of their quota, stock exchange data showed.
The maker of Sleepwell brand of mattresses had received only 1% subscription on day one and 6% on the second day.
The issue is an offer for sale, with Polyflex Marketing Pvt. Ltd, the firm that controls Sheela Foam, seeking to raise Rs510 crore through the issue. The public issue had a price band of Rs680-730 per share.
ICICI Securities Ltd and Edelweiss Financial Services Ltd are managing the Sheela Foam share sale.
A day before the IPO, Ghaziabad-based Sheela Foam raised Rs 153 crore ($22 million) from anchor investors, including Wipro Ltd chairman Azim Premji’s private investment firm PremjiInvest and several other mutual funds and institutional investors. PremjiInvest committed Rs 14 crore as part of the anchor allotment.
Sheela Foam had filed papers with the capital markets regulator Securities and Exchange Board of India (Sebi) on 29 July and received regulatory approval for the IPO on 2 November.
According to Crisil Ltd, based on revenue, Sleepwell 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.
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.
Sleepwell in India competes with other home-grown brands such as Kurlon Enterprise Ltd, Springfit and Springwel Mattresses Pvt. Ltd.