Shankara BuildPro, Bangalore-based retailer which is involved into home improvement and building products, has filed for an initial public offering to raise about Rs 450 crore. As per market sources, the company has filed the draft red herring prospectus (DRHP) with the market watchdog SEBI today and recommended to mop up between Rs 400 crore and Rs 450 crore via the sale, which will include promoters and investors diluting their stakes to the tune of 35 per cent.
The recommended IPO will empower private equity firm Fairwinds, which had pumped in close to Rs 120 crore in the year 2011, to exit Shankara, as per the sources. Shankara BuildPro was founded by Sukumar Srinivas, an alumnus of the IIM-Ahmedabad, two decades ago, had clocked a net profit of Rs 41.64 crore on an income of Rs 2,036 crore in financial year 2016.
The company functions through 100 retail stores under the tag of Shankara BuildPro is spawned over 10 states across the Southern, Western and Eastern markets looking into a large customer base across several end-user segments in urban and semi-urban markets through various ways- multi-channel sales approach, processing facilities, supply-chains and logistics capabilities. Shankara has roped in IDFC Bankand Equirus Capital as chief bankers for the issue along with HDFC Bank co-manager.
The company possesses 11 processing facilities having an aggregate installed capacity of 2.86 million tonne and is operating at an average capacity utilization of 93.75 per cent so far this financial year. The company has 58 warehouses measuring 0.58 million sqft, and an owned fleet of 47 trucks for last mile delivery and a product portfolio comprising 17,842 SKUs.
Shankara BuildPro is bullish about its future owing to the huge growth in housing demand, backed by the large market for home improvement products, like increasing demand for home solutions which have created a need for organized specialty home improvement and building product stores. Other than serving home owners, it also works in the semi-urban markets specific agricultural requirements of individual customers and small enterprises. In addition to retail, it also serves the enterprise and channel sales sectors where it caters initially to large end-users, contractors, and OEMs.
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