Manjushree Technopack files draft papers to raise Rs 3,000 crore via IPO

Manjushree Technopack IPO

Packaging solutions provider Manjushree Technopack is planning to raise Rs 3,000 crore via initial public offering as it has filed draft red herring prospectus with the capital markets regulator on August 20.

The IPO is a combination of fresh issuance of Rs 750 crore worth equity shares, and an offer-for-sale (OFS) of equity shares worth Rs 2,250 crore by promoter.

Promoter AI Lenarco Midco holds 97.54 percent shareholding in the company.

The Bangalore-based company may also consider fund raising of Rs 150 crore via private placement, preferential offer or any other method, before filing the Red Herring Prospectus (RHP) with the Registrar of Companies (ROC). If the pre-IPO placement is completed, the said amount will be reduced from the fresh issue.

On November 30, 2023, Moneycontrol was the first to report that private equity firm Advent International was exploring strategic options to unlock value in portfolio firm and packaging player Manjushree Technopak. The report added that Advent was pursuing a dual track process, by exploring both the IPO route as well as a stake sale.

Manjushree Technopack claimed to be the largest rigid plastic packaging (RPP) player in terms of installed capacity in India. It is a derivative of the consumer industry given its presence in the end industries such as food and beverages, home care, personal care, alco-beverage, paints and adhesives, pharmaceuticals, nutraceuticals, dairy and agrochemicals.

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With highest market share in terms of revenue of 7.4 percent in FY23 in the organised consumer RPP industry in India, the company serves a marquee customer base including Varun Beverages, Dabur India, Marico, Honasa Consumer, Hershey India, Kansai Nerolac Paints, Pernod Ricard, and Parag Milk Foods.

Manjushree will utilise Rs 500 crore, out of the net fresh issue proceeds for repaying debt. It had an outstanding borrowings of Rs 1,156.3 crore including CCDs (compulsory convertible debentures) of Rs 587.2 crore as of June 2024.

In addition, the reminder IPO funds will be used for inorganic growth through acquisitions and other strategic initiatives, and general corporate purposes, while the OFS money will go to the promoter.

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The company's financial performance was strong with net profit growing 138 percent on-year to Rs 140.8 crore for the year ended March 2024 despite muted topline growth, backed by strong operating numbers with lower input cost, exceptional gains, and lower tax expenses.

Revenue from operations for the fiscal 2024 grew by 1 percent to Rs 2,117 crore compared to Rs 2,096 crore in the previous year. EBITDA (earnings before interest, tax, depreciation and amortisation) for the financial year 2023-24 increased by 27.2 percent to Rs 373.3 crore with margin expanding by 360 bps to 17.6 percent compared to previous year.

Meanwhile, in April this year, Manjushree Technopack had acquired the plastics packaging business of Oricon Enterprises for an enterprise value of Rs 520 crore. The acquired business includes Oriental Containers, manufacturer of plastic caps & closures and preforms, primarily used in beverages, and comprises two manufacturing plants located in Goa and Odisha.

JM Financial, Avendus Capital, Citigroup Global Markets India, Goldman Sachs (India) Securities, and ICICI Securities have been appointed as the merchant bankers for the issue.