 "Tirupur-based SP Apparels to raise Rs 215 crore through IPO")
Tirupur-based SP Apparels is hitting the market with an initial public offering (IPO) to raise around Rs 215 crore by fresh issue of shares, the Draft Red Herring Prospectus (DRHP) filed by the company says.
From the targeted fundraising, it aims to use Rs 63 crore to repay or prepay its debt, Rs 70 crore for expansion and modernisation of its manufacturing unit at Valapady in Salem district, and around Rs 28 crore to open new stores for sale of its men’s wear brand Crocodile’s products. It plans to deploy the rest of the funds to add balancing machineries at its existing dyeing unit at SIPCOT, Perundurai and other general corporate expenses.
The company is also planning an offer for sale of up to 9,00,000 equity shares from existing shareholders.
Established in 1989, SP Apparels has been into export business for knitted garments for infants and children, mainly to the United Kingdom, which constituted around 84.62% of its total revenues during the fiscal year 2015. For FY15, it exported approximately 29.15 million pieces of knitted garments for infants and children directly to its international customers, including TESCO and Primark.
The company has plans to enhance and develop existing 'Crocodile' brand in India by diverting resources from its established businesses. Manufacturing of garments under Crocodile brand is pursuant to a sub-license granted to it by one of its subsidiaries through an agreement with Crocodile International Pte Limited, Singapore. Meanwhile, it is also considering the launch of products in the women's essential garments category under the 'Natalia' brand.
Its future plans also include deepening product penetration with existing customers, increasing customer base, strengthening retail presence and invest in infrastructure and technology.
As of November 30, 2015, the aggregate outstanding indebtedness of the company was Rs 251.89 crore, which includes long-term borrowings, short-term borrowings and current maturities of long-term borrowings.
The company has 20 manufacturing facilities. As of September 28, 2015, the company has 4,727 sewing machines, seven cutting machines, 79 embroidery machines, 17 printing machines, 16,896 spindles and 22 dyeing machines.