Sequoia-backed Prataap refiles for India IPO

The company will issue an undisclosed amount of new shares for up to INR2.5 billion ($38.7 million), while existing shareholders including Sequoia will offer up to three million shares, according to the prospectus. Pricing for the shares has not been announced.

Sequoia will sell 1.8 million shares in the offer. The GP holds 15 million shares in total through three investment vehicles, all of which will make partial exits. Its combined shareholding amounts to a 63% stake in the company.

Prataap filed its previous prospectus last October, and was approved for listing by the Securities and Exchange Board of India (SEBI) in April. Under the previous offer Sequoia had planned to exit 2.2 million shares. The overall size of the offer is about the same.

The refiling was triggered in part by the conversion of compulsorily convertible preference shares (CCPS) into equity, including 97,000 CCPS held by a Sequoia vehicle, under a board resolution passed in May. Following the conversion Sequoia gained 5.8 million shares, becoming a promoter, and also decided to join the offer.

Prataap plans to use INR626 million from the offer to repay its debt and that of its subsidiary Pure N Sure, while INR670 million will support construction of new manufacturing facilities and modernization of existing buildings. Another INR400 million will be used for marketing and brand building activities, while the remainder will support general corporate expenses.

Founded in 2003, Prataap sells potato chips, baked snacks and traditional namkeen under the Yellow Diamond brand in India. The company sees India’s snack market as a major opportunity, with demand expected to grow from INR220 billion in 2016 to INR430 billion by 2021. Its biggest competitor is PepsiCo, whose Lay’s and Kurkure brands have a combined market share of nearly 50% in both the potato chip and baked snack segments.

For the year ended March 2017 Prataap recorded INR9.1 billion in revenue, up from INR7.6 billion the year before. Over the same period, net profit fell from INR274 million to INR99 million.

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• Topics
• South Asia
• IPO
• Consumer
• India
• Sequoia Capital
• Exit