SKNL to file DRHP for Reid & Taylor's Rs 1,000 cr IPO in Aug

Textile major S Kumars Nationwide (SKNL) aims to raise Rs 1,000 crore by the end of this year through an initial public offer of its subsidiary, Reid & Taylor, and will file a Draft Red Herring Prospectus (DRHP) with Sebi in August, a top company official said.

SKNL will also spin-off its brand Belmonte into a subsidiary in which it will hold around 70-75 per cent, while the balance will be held by an overseas private equity firm, SKNL Vice-Chairman and Managing Director Nitin Kasliwal said.

"We aim to list Reid & Taylor by November-December and plan to file our DRHP this month. We are targeting Rs 1,000 crore through this IPO," Kasliwal told PTI here.

The proceeds of the IPO will be utilised for procuring new equipment, retail expansion and repayment of around Rs 400 crore of debt, he said.

On Belmonte, Kasliwal said the company has short-listed a private equity parter from around half-a-dozen firms and hopes to seal the deal by September-October.
    
"We plan to spin-off Belmonte into a subsidiary in which the PE firm will hold around 20-25 per cent. We are eyeing a valuation of around USD 100 million here (for the 20-25 per cent stake)," Kasliwal said.
    
Belmonte and its allied businesses have grown substantially, the brand has become very popular and deserves to be a standalone company, he said.
    
SKNL has lined-up a capex of Rs 500 crore this fiscal and will invest Rs 400-500 crore more in each of the next two years, Kasliwal said.
    
The capex will be for SKNL, Reid & Taylor and Belmonte, he said, adding that funding would be through internal accruals, debt and equity.
    
Asked about the QIP which the company is understood to be planning, Kasliwal said, "We have got an enabling resolution to raise up to Rs 500 crore. But we have as yet not decided on it."
    
The company is targeting an around 35 per cent growth in revenue this fiscal and is eyeing sales revenue of Rs 5,500-5,700 crore, he said, adding, "The way we are progressing, our EBIDTA should exceed Rs 1,000 crore."