PVC blend-based building materials manufacturer, Kumar Arch Tech, has submitted its draft papers to SEBI for a proposed ₹740 crore initial public offering (IPO). According to the filing on September 27, the IPO will consist of a fresh issue of shares worth ₹240 crore and an offer for sale (OFS) of ₹500 crore by the promoters.
The Rajasthan-based company, which operates under the ECHON brand, may also raise ₹48 crore through a pre-IPO placement. If this placement occurs, the size of the fresh issue will be reduced accordingly.
Kumar Arch Tech claims to be India’s largest manufacturer of PVC blend-based building materials, with an 18% market share as of March 2024 and a production capacity of 27,600 metric tonnes per annum (MTPA). The company is expanding its capacity with a new facility in Udaipur, which will add 90,000 MTPA, and has acquired a strategically located plant in Virginia, USA.
The company’s product portfolio includes boards, sheets, mouldings, and wall and ceiling panels used in residential, commercial, and industrial construction and renovation. In fiscal 2024, it accounted for 28% of India’s PVC blend-based building material exports to the US.
Competing with companies like Century Plyboards, Greenply Industries, and Astral, Kumar Arch Tech plans to allocate ₹182 crore from the fresh issue to fund a greenfield project through its subsidiary, Taylias Industry, with the remainder going towards general corporate purposes.
Despite a largely stagnant revenue of ₹407.9 crore, the company’s profit grew by 76% in fiscal 2024 to ₹110.8 crore, thanks to reduced input costs and other expenses. EBITDA surged by 68.5% to ₹139.2 crore, with margins expanding by 1,380 basis points to 34.1%.
Motilal Oswal Investment Advisors and Equirus Capital are the merchant bankers for the IPO.
