M Saraswathy Moneycontrol News
Kitchen appliances company Stovekraft, which has filed draft papers for an initial public offering (IPO), is looking at other potential markets across the globe. In an interaction with Moneycontrol, Neha Gandhi, Director, Stovekraft, said the company is currently present in 12 countries.
Started in 1999, Stovekraft has grown from a single-brand small LPG stove manufacturer to a large manufacturer of kitchen appliances, with revenue from operations of Rs 528.95 crore in FY18.
Market presence
Gandhi explained that exploring new countries and markets is a continuous process for the company. "We are in discussions with potential partners in Europe, which is yet to be crystallized," she said.
Apart from the 12 countries outside of India, Stovekraft is present in 23 states across the country. The company is known in the market because of its brands Pigeon and Gilma.
In FY18, Pigeon branded products contributed 86.89 percent of Stovekraft's overall sales, while Gilma branded products accounted for 4.74 percent.
The company sells cooking utensils like vessels, mixer-grinders, pressure cookers, toasters, cooktops and chimneys. It has also recently entered the LED lighting space.
IPO process
Stovekraft's IPO consists of a fresh issue of Rs 145 crore and an offer of sale for up to 7,163,721 shares, according to its draft red herring prospectus (DRHP).
"The IPO funds will be utilized for repayment of existing short-term and long-term debt and for general corporate purposes," said Gandhi.
As on the date when the DRHP was filed, Sequoia Group companies held 25.37 percent stake in Stovekraft. Promoters Rajendra Gandhi and Sunita Gandhi held 73.57 percent and 1.05 percent stake, respectively.
Ujjwala Yojana
Gandhi said that they expect the thrust will be high for both online and offline mode of distribution.
She explained that the online market is performing well on account of attractive consumer deals, better product assortment and positive consumer reviews and ratings by online platforms.
"The offline business is fuelled by improvement in macroeconomic factors, widening replacement market for cookware & kitchen appliances, a positive impact of implementation of GST and various government initiatives such as PM Ujjwala Yojana," she said.
Gandhi said that electrification of villages under Ujjwala Yojana has created demand for both electric and non-electric appliances.
The Pradhan Mantri Ujjwala Yojana was launched by PM Narendra Modi in May 2016. Under this scheme, 50 million LPG connections will be provided to below-poverty-line families with a support of Rs 1,600 per connection till May 2019.
Product push
Gandhi said that introduction of new products is a continuous process for Stovekraft.
"FY19 has already seen the launch of products like fastener free glass cooktops with Pigeon Infinity, a new range of die-cast non-stick cookware called Crest, stainless steel pressure cookers and a complete range of products under Black + Decker," she said.
In December 2017, US-based Black+Decker tied-up with Stovekraft. The American power tools and home products company said that it will introduce cooktops, food processors and air coolers in the Indian market as part of this partnership.
With the festive season in full swing, Stovekraft expects a 40 percent surge in business during these three months.
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