SMPP files draft red herring prospectus with Sebi, eyes Rs 4,000 cr via IPO

Defence equipment manufacturer SMPP Ltd has filed preliminary papers with capital markets regulator Sebi to raise Rs 4,000 crore through an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares aggregating up to Rs 580 crore and an offer for sale (OFS) of equity shares worth up to Rs 3,420 crore by promoter Shiv Chand Kansal, according to the draft red herring prospectus (DRHP) filed on Friday.

At present, Kansal holds 50 per cent stake in the company.

The company may consider a pre-IPO placement of securities valued at Rs 116 crore. If such placement is carried out, the fresh issue size will be reduced.

 

Proceeds from the fresh issue will be utilised primarily for capital expenditure of Rs 437.04 crore, which includes constructing buildings, land development, and procuring plant and machinery for a planned ammunition manufacturing facility through investment in a subsidiary.

The remaining amount will be allocated for general corporate purposes.

SMPP is an Indian designer and manufacturer of defense equipment, including ammunition components, personal protection products, and platform protection kits for land, air, and sea operations.

Since 1992, the company has been producing combustible cartridge cases for tank and artillery ammunition. The personal protection products include bullet-resistant jackets, armor plates, ballistic helmets, and shields for the armed forces, police, paramilitary, and other security forces.

Also, it offers platform protection kits for vehicles, patrol boats, aircraft, and helicopters, designed for use in combat, counter-insurgency, and anti-terror operations.

Axis Capital, ICICI Securities, IIFL Securities, JM Financial, and Motilal Oswal Investment Advisors are the book-running lead managers to the issue.

The shares of SMPP will be listed on the BSE and the NSE.