Sheela Foam IPO subscribed 1% on Day 1

Sheela Foam has fixed the IPO price band at Rs680-730

A screen grab of the Sheela Foam website.
A screen grab of the Sheela Foam website.

The initial public offering (IPO) of Sheela Foam Ltd, the maker of the Sleepwell brand of mattresses, got off to a slow start on Tuesday with just a little over 1% subscription at the end of Day 1, data available with the stock exchanges showed.

The IPO received bids for just 73,580 equity shares, as against 5.25 million equity shares on offer, with only retail investors applying to purchase stock in the company.

While institutional investors stayed away on the first day of the IPO, non-institutional investors bid for a negligible number of shares. Retail investors bid for about 3% of the issue reserved for them, the data shows.

The issue is entirely comprised of an offer for sale. Polyflex Marketing Pvt. Ltd, the company that controls Sheela Foam, will sell a part of its holding worth Rs510 crore through the issue.

The company has fixed a price band of Rs680-730 per share. The sale will end on 1 December.

Last week, GreenSignal Bio Pharma withdrew its IPO after it could not garner sufficient bids from institutional investors. The company was aiming to raise Rs116 crore, which was later reduced to Rs 110 crore.

A day before the IPO, Ghaziabad-based Sheela Foam raised Rs153 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 Rs14 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.

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

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

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