Creador-backed Vectus files India IPO

The offering will comprise new shares worth INR850 million ($12.5 million) and for sale of 3.9 million shares held by existing shareholders, of which 2.8 million are owned by Creador. Pricing terms have yet to be set. According to the prospectus, proceeds from the fresh offer will be used to pay off the company’s debt and to buy equipment for its manufacturing facilities.

Creador invested INR1 billion in Vectus in 2014, and currently holds a 21% stake. Vectus was established in 2004 by Ashish Baheti and Atul Ladha, who combined their existing water tank businesses founded in 1990 and 1993, respectively. The company makes water tanks, pipes and fittings, and household plastic products.

For the year ended March 2018, Vectus’ revenue came to INR5.8 billion, up from INR5.7 billion the year before. The pipes and fittings business contributed a majority of revenue in both years. Over the same period, net profit grew from INR345 million to INR430 million.

India’s per capita plastic consumption stood at 11 kilograms in 2017, well below the global average of 30 kg, reflecting the dominance of traditional materials for household products. However, this figure is projected to rise over the next few years, fuelled by low crude oil prices enabling cheaper plastics production.

Vectus expects cheaper manufacturing of plastics products to dovetail with increased demand for plastic water tanks in particular, which are lighter and consume less space than those made with alternative materials such as steel and concrete.

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• Topics
• South Asia
• IPO
• Industrials
• India
• Exit
• Creador
• manufacturing