Archit Nuwood files DRHP to launch India’s 2nd-largest SME IPO; maybe priced at Rs 260-280 per share

Archit Nuwood Industries IPO: Prem Chand, Vinod Kumar Singla and Vineet Kumar are the promoters of the company

Archit Nuwood Industries has filed a draft red herring prospectus (DRHP) with the BSE to launch India’s second-largest SME (small and medium enterprise) IPO. This will be an entirely  fresh issue of 62.4 lakh shares, likely priced between Rs 260 and 280 per share, and is expected to fetch around Rs 170 crore, two sources aware of the matter told Moneycontrol on condition of anonymity.

The company will use the  proceeds to invest in its wholly owned subsidiary, where the funds will be used for plant and machinery, acquisition of  land,  meeting working capital requirements, and the construction of buildings and electrical installations. The remaining funds will be used for general corporate purposes.

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Prem Chand, Vinod Kumar Singla, and Vineet Kumar are the promoters of the company. The book-running lead manager for the public offer is Share India Capital Services, while Maashitla Securities is the registrar.

In FY23, the company's revenue from operations grew 13.4 percent to Rs 152.33 crore, from Rs 134.25 crore in FY22, while EBITDA grew by around 250 percent to Rs 31.74 crore, from Rs 9 crore. The profit after tax (PAT) surged by roughly 380 percent, reaching Rs 21.28 crore in FY23 from Rs 4.43 crore in FY22.

According to the DRHP, the company’s listed peers are Rushil Décor, which reported a profit of Rs 77.67 crore on a revenue of Rs 838.4 crore in FY23, and Century Plyboards, which registered a PAT of Rs 366.84 crore on a revenue of Rs 3,621 crore in the same period

The company’s top 10 customers contributed 38.15  percent, 22.08 percent, 29.12  percent, and 44.70  percent of its revenues from operations for the seven months ended October 31, 2023, and for the years ended March 31, 2023, 2022, and 2021, respectively.

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The Negen Undiscovered Value Fund, Persistent Growth Fund — Varsu India Growth Story Scheme 1, Parag Bharat Mehta, Manish Mittal HUF, and Ankit Mittal, among others, participated in the pre-IPO round concluded in December 2023, as per the DRHP.

The company manufactures a broad range of MDF and HDF boards, and pre-laminated sheets of different varieties. Its factory is located in Tohana, Haryana, and is equipped with MDF and HDF plants, along with short-cycle presses.