The primary market continues to see surge in new public offering as three more companies have submitted their initial papers with market regulator Securities and Exchange Board of India (SEBI) to raise funds via initial public offering (IPO) route. The three companies include small scale lender Capital Small Finance Bank, and transport and logistics services provider CJ Darcl Logistics and engineering firm Dee Development Engineers, who recently filed draft red herring prospectus (DRHP) with the SEBI.
Headquartered in Gurugram (Haryana), CJ Darcl Logistics plans to raise funds through offer of equity shares (face value ₹10 each) via public offering. The offer comprises a fresh issue of equity shares aggregating up to ₹340 crore and an offer for sale (OFS) up to 5,431,071 equity shares by existing shareholders.
The company proposes to utilise net proceeds from the fresh issue towards repayment or prepayment of certain outstanding borrowings availed by the company. A part of the capital will be used for funding capital expenditure requirements of the company towards the purchase of electric vehicles (EVs), and to meet general corporate purposes. It owned a fleet of 990 vehicles as of March 31, 2023.
CJ Darcl Logistics is a diversified logistics company in India with market leadership in full truck load (FTL) vertical in terms of revenue for fiscal 2023, as per CRISIL report. The company commenced operations in 1975 as a family business and has over 36 years of operational experience since its inception and provides differentiated logistics solutions with its pan-India presence.
In 2017, South Korea-headquartered logistics firm CJ Logistics acquired 50% stake in Darcl Logistics Limited and was renamed as CJ Darcl Logistics. As per CJ DARCL’s rating rationale, CJ Logistics is the largest logistics company in South Korea and has operations across 161 cities in 36 countries, with 249 hubs.
Meanwhile, Capital Small Finance Bank plans to raise funds through issue of equity share of face value ₹10 each aggregating up to ₹450 crore and an OFS of up to 2,412,685 equity shares.
The OFS will see offloading of up to 836,728 equity shares by Oman India Joint Investment Fund II; up to 337,396 equity shares by PI Ventures LLP; up to 604,614 equity shares by Amicus Capital Private Equity I LLP; up to 70,178 equity shares by Amicus Capital Partners India Fund I (The Investor Selling Shareholder) and up to 563,769 equity shares by certain other persons listed in DRHP.
The bank proposes to use the net proceeds from the fresh issue towards augmenting the bank’s Tier 1 capital base to meet the bank’s future capital requirements. Further, the proceeds from the fresh issue will also be used towards meeting the expenses in relation to the offer.
Capital Small Finance Bank commenced operations as India’s first small finance bank (SFB) in 2016 and has the most diversified portfolio with sizable book in multiple asset classes as compared to other SFBs. It has the highest proportion of secured lending of 99.82% as of fiscal 2023 among the SFBs, as per CRISIL MI&A report.
As per the report, the bank is amongst the leading SFBs in India in terms of cost of funds, retail deposits, and CASA deposits for fiscal 2023.
On the other hand, DEE Development Engineers, an engineering company providing specialized process piping solutions for industries such as oil and gas, power (including nuclear), chemicals and other process industries, eyes to raise funds through offer of equity shares (face value ₹ 10 each) through initial public offerings. The offer comprises of fresh issue of equity shares aggregating up to ₹325 crore and offer for sale up to 7,900,000 equity share by selling shareholders.
The company proposes to use net proceeds from fresh issue for funding working capital requirements; prepayment or repayment of all or a portion of certain outstanding borrowings availed by Company and its subsidiaries, DEE Piping Systems (Thailand) Co. Limited and DEE Fabricom India Private Limited; and general corporate purposes.
DEE Development Engineers is one of the leading process pipe solution providers in the world, in terms of technical capability to address complex process piping requirement arising from multiple industrial segments, as per D&B report. Currently, the company is the largest player in process piping solutions in India, in terms of installed capacity, the report noted.
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