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Defense equipment maker SMPP Ltd has filed preliminary papers with capital markets regulator Sebi for a Rs 4,000-crore IPO. The IPO will see fresh issuance of equity shares worth Rs 580 crore, and equity shares worth Rs 3,420 crore will be offered for sale by promoter Shiv Chand Kansal, according to a draft red herring prospectus (DRHP) filed by the company on Friday.
Currently, Kansal holds a 50% stake in the company.
The company may consider a pre-IPO placement of up to Rs 116 crore. If this is done, the size of the new shares will be reduced. The fresh capital raised from the IPO will be used mainly for capital expenditure of Rs 437.04 crore, which includes construction of buildings, land development, and purchase of plant and machinery for the ammunition manufacturing unit. This investment will be made through a subsidiary of the company. The rest of the amount will be used for general corporate purposes.
SMPP is an Indian company that manufactures defense equipment. This includes ammunition parts, personal protective equipment (such as bulletproof jackets, armor plates, and helmets), and safety kits for use on land, air, and sea.
Since 1992, the company has been manufacturing inflammable cartridge cases for tank and artillery ammunition. Its personal protection products include bulletproof jackets, armor plates, ballistic helmets, and shields for security forces.
In addition, the company also offers platform protection kits for vehicles, patrol boats, aircraft, and helicopters, designed for combat, counter-terrorism, and counter-insurgency operations. Axis Capital, ICICI Securities, IIFL Securities, JM Financial, and Motilal Oswal Investment Advisors are the lead managers of this IPO. Shares of SMPP will be listed on BSE and NSE.
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