IPO proceeds will be used to reduce debt by 75%: S Chand

Education content company S Chand plans to repay loans worth Rs 255 crore from its IPO opening on April 26, that would reduce its debt burden by 75 per cent.
The IPO comprises fresh issue of shares worth Rs 325 crore in addition to Rs 403 crore of offer for sale at the higher band of Rs 670. The total size of the IPO will be about Rs 728 crore at the higher band.
The repayment will partially include the loans it had taken to acquire publishing firm Chhaya Prakashani in December last year as also the loans taken by its subsidiaries -- New Saraswati House and Vikas Publishing house.

"From the fresh issue with which the company will raise Rs 325 crore, Rs 255 crore would be used to pay the debt which will be around 75 per cent debt reduction in the company," S Chand and Company Managing Director Himanshu Gupta told PTI.
The company, whose IPO is scheduled to open on 26 April and close on 28 April, has fixed a price band of Rs 660-670 per share.
The remaining funds would be used for general corporate purposes and IPO expenses, Gupta added.

The offer for sale includes 9,54,907 equity shares by promoters, up to 2,53,593 shares by other selling shareholders and up to 48,14,736 equity shares by private equity fund Everstone Capital Partners II LLC.

At the upper end of the price band, the public issue is expected to fetch Rs 728.55 crore.
"The company has done a lot of acquisitions in the last 3-4 years, so we believe that the IPO will help us in having more of a cash plus stock options that we can use for future acquisitions if and when we do it," Gupta said.
Last year, the company had acquired 74 per cent of the outstanding share capital of Chhaya Prakashani Pvt Ltd.
The firm has appointed JM Financial Institutional Securities, Axis Capital and Credit Suisse Securities (India) Pvt Ltd as merchant bankers to the issue.

As on December 31, 2016, S Chand offers 55 consumer brands across knowledge products and services, including S Chand, Vikas, Madhubun, Saraswati, Destination Success and Ignitor.