Private equity firm Oman India Joint Investment Fund (OIJIF) has picked up a 5% stake in Prince Pipes and Fitting Ltd for Rs100 crore in the ongoing initial public offering of the company, documents filed by the company show.
The PE investor, which counts Oman's sovereign wealth fund State General Reserve Fund of Oman and India's biggest lender State Bank of India as its sponsors, picked up the stake through participation in the anchor allocation one day ahead of the opening of the IPO, as well as through a secondary purchase of shares from the company's promoters.
OIJIF invested ₹50 crore in the anchor book of Prince Pipes IPO, while it bought the remaining stake worth ₹50 crore in a secondary purchase from promoters, filings show.
“There is a strong replacement demand for plastic pipes, which is driving high double digits growth in the industry, thus attracting a PE fund to invest in the company," a person close to the development said on the condition of anonymity.
The plastic pipes’ industry, due to higher irrigation and affordable housing spending by the government and strong replacement demand in plumbing and sewage works, is projected to accelerate over the next five fiscals at a CAGR of 12-14% to reach ₹500-550 billion by fiscal 2024, according to CRISIL Research.
The 30-year-old company, which sells products under Prince Piping Systems and Trubore brand names, has fixed a price band of ₹177-178 per share, and is expected to raise ₹500 crore through the IPO.
The company’s sales from operations for the year ended 31 March stood at about ₹1,572 crore, with profit at ₹83 crore. It has a product range of nearly 7,167 stock keeping units that are used for varied applications in plumbing, irrigation, and soil, waste and rain water management.
The pipes manufacturer runs six plants across India with a total installed capacity of 0.24 million tonnes per annum as on 31 October.