EAPCK Durable Sets Price Band for Rs 640 Crore IPO

EAPCK Durable, India's second-largest outsourced design manufacturer of room air-conditioners, has announced a price band of Rs 218-230 per share for its upcoming initial public offering (IPO). The public offering, scheduled to open on January 19, comprises a fresh issue of Rs 400 crore and an offer for sale (OFS) of Rs 240 crore by promoters, promoter group members, and existing shareholders.

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Promoters and Investors

Prior to the IPO, promoters held a 67% stake in the company. Two investor shareholders, India Advantage Fund S4 I and Dynamic India Fund S4 US1, owned by ICICI Ventures, will be offloading a third of their combined 20% holding in the company. ICICI Ventures had entered the company in September 2021 with a Rs 160 crore funding for a 20% stake. Another external investor, Affirma Capital, had invested Rs 160 crore for a 13% stake in September 2022, but this fund will not participate in the OFS.

Offer for Sale Details

The OFS includes the sale of shares by several promoters and promoter group members. Bothra will sell up to 1,172,976 shares, Laxmipat Bothra up to 6,66,798 shares, Sanjay Singhania up to 7,48,721 shares, and Ajay Singhania up to 7,48,721 shares. Additionally, Pinky Singhania will sell up to 2,86,351 shares, Preity Singhania up to 2,86,351 shares, Nikhil Bothra up to 4,42,905 shares, Nitin Bothra up to 4,42,905 shares, and Rajjat Kumar Bothra up to 3,79,633 shares.

IPO Objectives and Utilization of Proceeds

At the upper end of the price band, the IPO is expected to raise Rs 640 crore. Half of the issue size has been reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and the remaining 15% for Non-Institutional Investors (NIIs). The proceeds from the fresh issue will be used for funding capital expenditure for setting up manufacturing facilities, repaying Rs 80 crore of the company's Rs 170 crore debt, and general corporate purposes.

Company Overview and Future Plans

Founded in 2002, EPACK manufactures room air conditioners and small household appliances. The company aims to expand its product portfolio to include a wider range of home appliances such as induction cookers, hair dryers, mixer grinders, and coolers. EPACK will continue to operate as an ODM (Original Design Manufacturer) player and will not enter direct marketing or sales.

Market Position and Competition

In the ODM market, EPACK is the second-largest player with a 20% market share, following Amber. The third-largest player is PG Electro. Both Amber and PG Electro are already publicly traded companies.

Book-Running Lead Managers

Axis Capital, Dam Capital Advisors, and ICICI Securities are the book-running lead managers to the issue.