Sresta Natural Bioproducts Files DRHP for an IPO

Even as the IPO scene has been quiet in January 2022 till date, companies are continuing to file for IPOs on an aggressive basis. The latest file for its proposed IPO is Sresta Natural Bioproducts which is based out of Hyderabad in the state of Telangana. The indicative size of the IPO will be around Rs.500 crore.

Sresta Natural Bioproducts filed its draft red herring prospectus (DRHP) with SEBI for its proposed IPO. The IPO will be a combination of fresh issue and an offer for sale. While the fresh offer for sale will be for funding its loan repayment / prepayment, the OFS portion will be to give exit to its promoters and early investors.

As per the DRHP filed with SEBI, Sresta Natural Bioproducts IPO comprises of a fresh issue of Rs.50 core and an offer for sale of 70,30,852 shares by the promoters and the early shareholders of the company. The OFS component is expected to be worth around Rs.450 crore.

Sresta Natural Bioproducts is based out of Hyderabad and owns the popular 24 Mantra Organic brand, which is quite popular locally. It sells a variety of packaged food products under this brand and these include cooking ingredients, dry fruits, organic tea and other related products. Natural products have acquired added importance after COVID-19.

The fresh issue proceeds will be used for repayment / prepayment of loans, financing its working capital needs as well as for general corporate purposes. The funds that will be participating in the OFS include some of the early investors in the company like Peepul Capital Fund, Ventureast Life Fund and Ventureast Trustee company.

The issue will be predominantly an institutional issue with 75% of the issue size reserved for the qualified institutional byers (QIB) segment. While 15% will be reserved for the HNI investors the balance 10% will be reserved for allocation to retail investors. The allocation to retail would be quite small in this IPO.

The book running lead manager (BRLMs) for the issue will be Axis Capital and JM Financial. KFintech Technologies (formerly Karvy Computershare) will be the registrar to the issue.

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