Gujarat based Exxaro Tiles Limited, one of the leading manufacturer of vitrified tiles in India having one of the highest operating profit margins in the organized ceramic industry; has filed its Draft Red Herring Prospectus (DRHP) to raise between Rs. 150-160 cr according to market sources.
According to the DRHP filed, the Initial Public Offering of up to 13,424,000 equity shares, of face value of Rs. 10 each, will comprise of a Fresh Issue of up to 1,11,86,000 equity shares and an Offer For Sale of up to 2,238,000 equity shares by the Selling Shareholder Mr. Dixitkumar Patel. The equity shares will be listed on NSE and BSE.
The Company may, in consultation with the BRLM, consider a pre-ipo placement of up to 2,200,000 equity shares for cash consideration. The number of equity shares pursuant to the pre-ipo placement will be reduced from the Fresh Issuance.
The portion reserved for Qualified Institutional Buyers will be upto 50% of the offer, Non-Institutional Investors will have upto 15% of the portion reserved while upto 35% will be reserved for the Retail Investors. A certain portion of the offer will be reserved for the Eligible Employee Category.
The Net proceeds from the Fresh Issue would be utilized towards repay/prepay of borrowings, fund its working capital requirements besides utilizing it for general corporate purposes.
Promoted by Mukeshkumar Patel, Dineshbhai Patel, Rameshbhai Patel and Kirankumar Patel, Exxaro Tiles started off as a partnership firm in 2007-2008 to manufacturer frit and thereafter diversified and is now primarily engaged in the business of manufacturing and marketing of vitrified tiles used majorly for flooring solutions catering to residential and commercial segments. It currently has a 2000+ dealer network across 27 states.
The Company has one of the single largest manufacturing plants for glazed vitrified tiles and has a combined manufacturing capacity of 1.32 cr sq. mt p.a. Exxaro clocks one of the highest operating profit margins in the organized ceramic industry with EBITA of close to 20% as per the current fiscal. In last fiscal of FY 20, Exxaro Tiles reported Rs 240.74 crs as its revenue from operations with EBITA of Rs. 43 crs and Profit after Tax of Rs 10.85 crs. Its revenues from exports have seen a CAGR growth of 150.87% between Fiscals 2018 and 2020.
The size of the Indian tiles industry was estimated to be around Rs 35,000 to Rs 40,000 crores in 2019 with exports comprising of close to 35% of the sector revenue. The export of ceramic tiles from India has doubled in the last three years to 360 sq mt mn in 2019 from 186 sq mt mn in 2016. China, the world's largest producer, consumer and exporter of ceramic tiles over the past few years, has seen a decline in its dominance in the global tiles market.
Pantomath Capital Advisors Pvt Ltd. is the appointed lead manager to the Issue.