Rigid packaging company Bharat PET has made an important move in its journey to float the company’s IPO by filing the draft red herring prospectus with the capital markets regulator SEBI.
Bharat PET plans to raise up to Rs. 760 crore through the IPO, which will comprise a fresh issue of equity shares and an offer for sale of equity shares by existing promoter shareholders.
The proposed public issue reflects the growing momentum in India’s primary markets, where mid-sized manufacturing firms are increasingly tapping investor interest to fund expansion and strengthen balance sheets.
The company has planned to raise around Rs. 120 crores through the fresh issue of shares. The funds will be used to settle or pre-pay debt, invest in machinery, and for general corporate purposes.
The attempt to raise capital for the company is likely to benefit Bharat PET in increasing scale and efficiency in manufacturing, as the company operates in a market where the requirement for rigid plastic packaging continues to grow for industries such as agrochemicals, pharmaceuticals, and FMCG.
The company is also planning to raise around Rs. 24 crores through a pre-IPO placement. If this is done, the size of the fresh issue may be reduced.
A substantial part of the IPO, amounting to Rs. 640 crore, will be raised through the route of offer for sale. The members of the promoter group are likely to be diluting some of their holding in the company as it gears up for its stock market debut.
This is a common practice for public issues, where existing investors get a chance to exit some of their holding in the company.
Bharat PET, incorporated in 1998, is a manufacturer of PET bottles, jars, caps, closures, and multi-layer containers for specialized packaging requirements. The firm currently has over 1,500 customers, including a substantial presence in the agrochemical segment.
Bharat PET's manufacturing facilities are located in Delhi, Sonipat, Ankleshwar, and Jammu, thus enabling it to effectively service clients across different geographical locations.
The DRHP filing is the first step in the IPO process. Other key information, including price bands and dates for listing, will be intimated after approval from SEBI and based on market conditions.