Two-wheeler helmets and accessories maker Studds Accessories Ltd has reignited its plans for an initial public offer of shares and has initiated talks with investment bankers as the domestic market is rising high on a IPO frenzy, sources said.
The company, which has over a fourth of the market share in India in two-wheeler helmets, had filed for an IPO in 2018 and had obtained regulatory approval for it, but did not go through with it as it was seeking a higher valuation than what it was getting, sources said.
Six years down the line, with the appetite for Indian IPOs stronger than ever, the company has started the process again though the valuation expectations may be more tempered. There was no response from the company to an email sent to it seeking clarification.
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In the 2018 filing the company had planned to raise ₹98 crore through a fresh issue and there was an offer for sale component of 3.9 million shares. While the IPO amount is yet to be decided, sources said the company was generating adequate cash and the OFS portion was likely to be higher than the fresh issue.
In the grey market the company’s shares are currently trading at around ₹950-levels having seen an uptick from the low of ₹825 in May this year. However the unlisted share price has fallen sharply from the ₹2000-levels seen in 2021.
With a dominating presence in the helmets market, the four-decades old company has been consistently making profits over the last decade though net profit more than halved from the peak seen in FY20 and FY21, when it had reported net profit of ₹74 crore, according to data provided by Tracxn. Revenue has risen over three times during that period ending FY23 with a topline of ₹506.5 crore. Expenses have also risen in the same proportion.
In FY23 it sold over 6.4 million helmets and luggage boxes and while it exports to over 65 countries, nearly 87 per cent of its sales are in India.
While the motorcycle and scooter helmet is it flagship product, it also sells gloves, faces shields and masks, jackets, bicycle helmets and other items.
It ended the year with a net worth of ₹338 crore and net debt of ₹30.6 crore. It generated over ₹39 crore cash from operating activities in FY23, up from ₹24.4 crore, the previous year.