The IPO of Sheela Foam, maker of Sleepwell mattresses, will be an offer for sale by promoters, firm won't raise primary capital
Mumbai: Sheela Foam Pvt. Ltd, which sells mattresses under the Sleepwell brand, is looking to launch a Rs510 crore initial public offering (IPO) before the end of this month, according to two people aware of the plan.
“They (Sheela Foam) have almost completed their investor road shows and they are looking at launching the deal in the second half of the month. They want to do it before the end of November as December tends to be a difficult time to launch a deal given that in the second half of the month investors in the West are on leave for year-end festive holidays," said the first person cited above, requesting anonymity. “If one is not able to launch in this window, then they have to wait till January for launch."
Last week, Mint had reported that private equity firm Warburg Pincus-backed generic-drug maker Laurus Labs Ltd is also planning to launch its Rs1,000 crore IPO by the end of November. Laurus Labs plans to raise around Rs300 crore of primary capital through its IPO, while the rest of the share sale will be an offer for sale by its investors Warburg and another private equity firm, Eight Roads.
ICICI Securities Ltd and Edelweiss Financial Services Ltd are managing the share sale for Sheela Foam.
The IPO is a pure offer for sale by promoter entities and Sheela Foam will not be raising any primary capital for investing in the business.
“The Company has filed DRHP on 29th July 2016 with SEBI for a Public Issue of Rs. 510 crore through an offer for sale by one of its promoters. The timing of issue will be decided by company and merchant bankers based on Market and other conditions," a Sheela Foam spokesperson said in an email response to questions on the IPO.
In addition to its Sleepwell brand of mattresses, Sheela Foam, which was 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.
Sheela Foam also has a presence in Australia, manufacturing PU foam through its subsidiary Joyce Foam Pty Ltd.
The company’s home comfort line comprises of products such as mattresses, furniture-cushioning, pillows, cushions, sofa-cum-beds, as well as PU foam cores used for manufacturing finished home comfort products.
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 12 manufacturing facilities and 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.
There have been about 24 IPOs this calendar year, which collectively raised Rs24,940.8 crore, according to data from primary market tracker Prime Database.