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19 Nov 2024
Kumar Arch Tech, a leading producer of PVC blend-based building materials, has submitted draft papers to SEBI as it seeks to raise Rs 740 crore through an Initial Public Offering (IPO).
The offer includes a fresh issue of Rs 240 crore and an offer-for-sale by promoters totaling Rs 500 crore. Filed on September 27, the company, operating under the ECHON brand, may also secure Rs 48 crore in a pre-IPO placement, reducing the fresh issue size accordingly.
Claiming the title of the largest manufacturer of PVC2 blend-based products in India, Kumar Arch Tech holds an 18% market share as of March 2024 and has a production capacity of 27,600 MTPA. The company is expanding its operations, with plans to build a facility in Udaipur to increase its capacity to 90,000 MTPA. Additionally, it has acquired a plant in Virginia, USA. The company's products, including boards, mouldings, and panels, cater to various construction sectors, and Kumar Arch Tech accounted for 28% of India’s exports of PVC blend-based materials to the U.S. in fiscal 2024.
The IPO proceeds will primarily fund a greenfield project under its subsidiary, Taylias Industry, for which Rs 182 crore will be allocated. The remaining amount will cover general corporate expenses. Financially, Kumar Arch Tech saw a 76% profit rise in fiscal 2024 to Rs 110.8 crore, with revenue remaining flat at Rs 407.9 crore. EBITDA grew by 68.5% to Rs 139.2 crore, while operating margins expanded to 34.1%. Motilal Oswal Investment Advisors and Equirus Capital are handling the issue.
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