Mumbai: Sheela Foam Ltd, the maker of the Sleepwell brand of mattresses, will launch its share sale on 29 November. Polyflex Marketing Pvt. Ltd, the company that controls Sheela Foam, will sell a part of its holding through the initial public offering (IPO). The offer for sale will see the promoter entity sell shares worth Rs510 crore. The company has fixed a price band of Rs680-730 per share for the issue. The sale will end on 1 November. ICICI Securities Ltd and Edelweiss Financial Services Ltd are managing the share sale for Sheela Foam.Mint reported on 10 November that Sheela Foam will sell shares to the public for the first time in November. In addition to the Sleepwell brand, Sheela Foam, incorporated in 1971, also makes other foam-based home comfort products targeted primarily at Indian retail consumers, as well as technical grades of polyurethane foam (PU foam) for end-use in a wide range of industries. The Sleepwell brand was introduced in 1994.The company’s home comfort line includes products such as mattresses, furniture-cushioning, pillows, cushions, sofa-cum-beds, as well as PU foam cores used for making finished home comfort products.“
Our technical foam business caters to various end-use industries such as foams for power generators, industrial filters, electronic packaging, shoe industry and helmets, among others,” said Rahul Gautam, managing director of Sheela Foam. Technical foam contributes to 20% of the company’s business.It also supplies foam to online furniture companies such PepperFry and UrbanLadder, he said. According to Gautam, the mattress industry is expected to continue to grow strongly. “Of the almost Rs9,000 crore mattress market, only about 30% or Rs3,000 crore is organized. The growth of the market will be driven by a growing movement of customer preference towards the organized market,” he said. The implementation of the goods and services tax (GST) will also benefit the company, said Gautam. “Today, our logistics is oriented state-wise because of tax reasons. However, with GST we will be able to reorganize the logistics to better serve our markets. GST will also create a level playing field for different mattress types,” he said.
Sheela Foam also has a presence in Australia, manufacturing PU foam through its subsidiary Joyce Foam Pty Ltd. It acquired the company in 2005.In fiscal years 2014-15 and 2015-16, revenue from the sale of home comfort products aggregated to Rs916 crore and Rs1,016.4 crore, constituting 64.6% and 65.5%, respectively, of Sheela Foam’s total revenue for these years.According to Crisil Ltd, based on revenues, Sleepwell branded mattresses constituted a share of around 20-23% of the organized Indian mattress market as of 2015-2016.Sheela Foam has 11 manufacturing facilities in India and five in Australia. It has a nationwide network of more than 100 distributors and around 5,000 dealers. The company also exports its products to almost 25 countries, according to its website.Sleepwell in India competes with other home-grown brands such as Kurlon Enterprise Ltd, Springfit, and Springwel Mattresses Pvt. Ltd.The initial public offering of Sheela Foam Ltd, which makes mattresses under the Sleepwell brand, sailed through on the final day of the offering thanks to strong interest from institutional and affluent individual investors.
The issue was subscribed a little more than five times at close, stock-exchange data showed on Thursday. The portion reserved for institutional investors was covered 14.5 times while the quota for non-institutional investors was subscribed almost three-and-a-half times. Retail investors’ quota, however, was covered only 44%. The issue was covered just 1% at the end of day one and 6% at the end of day two. Sheela Foam joins a long list of companies such as PNB Housing Finance Ltd, RBL Bank Ltd, Quess Corp, Advanced Enzyme Technologies Ltd, Thyrocare Technologies Ltd and TeamLease Services Ltd that have seen strong demand for their IPOs this year. RBL Bank’s IPO was covered almost 70 times while that of Quess Corp was covered 144 times. The robust response to these IPOs comes after market volatility in the first half of this year had forced several firms to skip their planned share sales. However, a subsequent rebound in the secondary markets offered hope to companies looking to float IPOs.
Sheela Foam’s IPO would also give hope to other companies such as drugmaker Laurus Labs Ltd that are in the queue to float public offerings because it comes in the middle of the government’s demonetisation drive, which banned Rs 500 and Rs 1,000 banknotes to combat graft, forgery and tax evasion but led to a severe cash crunch in the economy. The poor show in the first two days was worrisome for Sheela Foam and its bankers because last week another IPO was scrapped after it failed to find institutional investors despite reducing the offer size and extending the issue period. The IPO of GreenSignal Bio Pharma Ltd was the first after the government kicked off the demonetisation drive. Sheela Foam is seeking a valuation of as much as Rs 3,561.14 crore (roughly $520 million) through the IPO. It had raised Rs 153 crore ($22 million) from anchor investors on Monday. The issue entirely comprises an offer for sale by one of the promoter companies, Polyflex Marketing Pvt Ltd, and the firm will not get any money from the IPO.
The overall issue is worth Rs 510 crore ($77 million). After the issue, the promoter Gautam family is likely to retain around 86% stake in the company. Sheela Foam filed its IPO proposal with the Securities and Exchange Board of India in July. The company received regulatory clearance for the proposed IPO on 2 November. In the grey market, Sheela Foam's shares continued to quote a discount to its price band of Rs 680-730 apiece, said two dealers on the condition of anonymity. One dealer maintained that retail investors kept funds reserved for Laurus Labs’s IPO, which opens on 6 December. Edelweiss Financial Services Ltd and ICICI Securities Ltd are the merchant bankers for the IPO.Sign up for our daily newsletter to get our top reports. Kurlon Mattress - Rubberised Coir New Spinekare 5 InchMemory Foam, Rubberized Coir(Filling Material) Some of the prominent features of Kurlon New Spinekare mattress are- Spinekare is a scientifically designed and developed therapeutic Mattress
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