India's Quick Heal, Parag Milk Foods file for IPOs
Indian security software developer Quick Heal Technologies and dairy firm Parag Milk Foods have filed for IPOs, seeking INR2.5 billion ($38 million) and INR3.25 billion, respectively. Parag has also raised an additional INR600 million from existing backer IDFC Alternatives.
Quick Heal's IPO will consist of an undisclosed number of newly issued shares, along with up to 6.8 million shares held by current stockholders, according to a filing. The latter includes 2.8 million shares held by Sequoia Capital, which committed INR6 billion to Quick Heal in 2010 and currently holds a 10.25% stake in the company. After the sale Sequoia will be left with about 3.4 million shares.
The company has not announced the pricing for the new shares. Of the newly raised funds, the majority - INR1.1 billion - will be used for advertising and sales promotion, with INR419 million to be spent on research and development and INR306 million on office space.
With India's IT industry growing rapidly, Quick Heal believes it is well positioned to benefit from the need for reliable security software. The company provides antivirus and anti-malware products for Windows, Mac, iOS, Android and Linux, and targets the enterprise, educational, government and home user markets. It claims to have a market share of over 30% in India's software security retail segment.
Quick Heal reported revenue of INR2.9 million for the year ended March 2015, up from INR2.5 billion the year before. Profit for the same period fell from INR892 million to INR823 million.
Parag's IPO will also offer a partial exit for its backers IDFC and Motilal Oswal Private Equity (MOPE), with the company offering 19.9 million shares currently existing shares, along with an undisclosed amount of new shares. IDFC will sell 8.3 million shares, and MOPE will sell 5.6 million, according to its filing.
The proceeds will be used primarily to finance the expansion and modernization of Parag's manufacturing facilities and dairy farm. Funds will also be allocated toward loan repayments.
Founded in 1992, Parag produces a diverse range of dairy products, including milk, cheese, clarified butter, yogurt and milk powder. Its products are sold across India under four brands. MOPE committed $14.1 million in 2009 and then exited a portion of its stake in 2012 when IDFC invested INR1.55 billion. International Finance Corporation committed $17 million to the company in 2013.
For the year ended March 2015, Parag reported INR14.4 billion in revenue, growing from INR10.9 billion the previous year. Profit grew from INR146 million to INR295 million.
Parag is the latest Indian dairy to list, following Prabhat Dairy, which submitted its prospectus in April and debuted in September. Prabhat saw a lukewarm response to its offering, which was fully subscribed after a three-day extension and a price cut to INR115 per share from INR140 per share. Investors Rabo Equity Advisors and Proparco also reduced the amount of shares they planned to sell.
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