September 28, 2024
New Delhi, India
Upcoming IPO
Kumar Arch Tech, a Rajasthan-based manufacturer of PVC blend-based building materials, has filed preliminary papers with the Securities and Exchange Board of India (SEBI) to raise ₹740 crore through an Initial Public Offering (IPO). The proposed IPO includes a fresh issue of shares worth ₹240 crore and an offer-for-sale (OFS) by promoters amounting to ₹500 crore.
Key Details of the IPO:
- Fresh Issue: ₹240 crore
- Offer-for-Sale (OFS): ₹500 crore by promoters
- Pre-IPO Placement: The company may raise an additional ₹48 crore in a pre-IPO placement, which would reduce the fresh issue size accordingly.
Use of Proceeds:
Proceeds from the fresh issue will be primarily used to invest ₹182.09 crore in its subsidiary, Taylias Industry Private Limited, to finance capital expenditure for a greenfield project focused on manufacturing PVC-based products.
Market Position and Expansion Plans:
Kumar Arch Tech, operating under the ECHON brand, claims to be India’s largest manufacturer of PVC blend-based building materials, holding an 18% market share as of March 2024. The company plans to increase its production capacity by establishing a facility in Udaipur, with an annual installed capacity of 90,000 MTPA. Additionally, Kumar Arch Tech has acquired a facility in Virginia, USA, as part of its global expansion strategy.
The company’s products, including boards, sheets, mouldings, wall, and ceiling panels, are widely used in the residential, commercial, and industrial sectors.
Financial Performance:
Kumar Arch Tech has reported strong financials, with a 76% growth in profit to ₹110.8 crore in FY24, despite stagnant revenue growth of 0.15% at ₹407.9 crore. The company’s EBITDA surged by 68.5% to ₹139.2 crore, with margins expanding by 1,380 basis points to 34.1% compared to the previous fiscal year.
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