Raymond Group informed its board approved subsidiary, JK Files & Engineering's IPO comprising an OFS for Rs 800 crore. The IPO will not constitute any fresh issuance of shares.
Raymond Group informed on Wednesday that its board approved listing its auto parts business and its wholly-owned subsidiary, JK Files & Engineering Limited. In a regulatory filing to the Bombay Stock Exchange, the company stated that the initial public offer would comprise of an offer for sale for Rs 800 crore, subject to variation as permitted under applicable law.
It added that the IPO would not constitute any fresh issuance of shares and will be undertaken after requisite regulatory approvals and market conditions.
"...the Board of Directors of the Company, at its meeting held today i.e. December 01, 2021, approved the OFS for Rs. 800 Crore subject to such variation as permitted under applicable law in the IPO through book building process which will help deleverage Raymond Limited," Raymond Group stated in the regulatory filing.
The company informed that its shareholding in JK Files and Engineering would be reduced as per shares that would be tendered for sale under the OFS. However, it would continue to remain a material subsidiary of the company.
The Raymond Group had spoken about the consolidation of its auto and engineering businesses, as part of a restructuring scheme, in September. "The Board of Raymond Limited has approved the consolidation of Tools & Hardware and Auto Components businesses into Engineering business for improving synergies and exploring monetization options for deleveraging Raymond Ltd," the company had stated in its press release.
It added the objective behind the move was to create value for shareholders. The company mentioned that its engineering businesses had achieved scale and improved market share in both domestic and global markets. As per the Raymonds Group, the businesses had demonstrated growth in EBITDA margins, generated free cash flows and were debt-free.