Swara Baby Products, a contract manufacturer of disposable hygiene products and a subsidiary of Brainbees Solutions, has received approval from SEBI for its proposed ₹1,000 crore initial public offering (IPO), according to inc42.com. The IPO will include a fresh equity issue worth up to ₹500 crore and an offer for sale (OFS) of shares aggregating up to ₹500 crore. Brainbees Solutions, which holds a 76.6% stake in Swara, will sell shares worth up to ₹300 crore through the OFS.
Swara Baby Products filed its draft red herring prospectus (DRHP) in July this year, with SEBI issuing the final observation recently. Alongside Brainbees Solutions, another promoter selling shareholder, Anadya Bon Merchari LLP, will offload shares worth up to ₹200 crore. The company is also considering a pre-IPO placement of up to ₹100 crore. The fresh issue proceeds will primarily be used to expand manufacturing capacity and reduce debt.
The company plans to allocate ₹198.2 crore to set up a new manufacturing facility in Madhya Pradesh and ₹100 crore towards repayment or prepayment of borrowings. Additionally, ₹27.5 crore will be invested in its subsidiaries Solis Hygiene, Swara Hygiene, and K.A. Enterprises Hygiene Pvt Ltd for debt repayment. Swara Baby Products also intends to pursue inorganic growth through acquisitions and general corporate purposes. Founded in 2018, the company operates in the disposable hygiene products sector.
Brainbees Solutions owns a majority stake in Swara Baby Products, and the IPO marks a significant step in the company’s expansion strategy. The final observation from SEBI was issued this week, clearing the way for the IPO to proceed. The company’s plans include scaling manufacturing and strengthening its financial position through the ₹1,000 crore offering.