Capillary Technologies (India) Ltd, which offers artificial intelligence-based cloud-native Software-as-a-Solution (SaaS) products and solutions, has filed draft red herring prospectus with SEBI for a proposed ₹850-crore IPO

The initial public offering, with a face value of ₹2, consists of a fresh issue of equity shares aggregating to ₹200 crore, and an offer for sale of ₹650 crore by its promoter Capillary Technologies International Pte Ltd, according to DRHP.

PEs to stay invested

The company is backed by Warburg Pincus, Sequoia Capital, Avataar Capital, Qualcomm Asia Pacific and Filter Capital. The private equity firms will stay invested in the company and are not diluting their stake in this IPO, according to the filings.

Additionally, the company, in consultation with the lead bankers to the issue may consider a further issue of equity shares including a private placement aggregating up to ₹20 crore. If such placement is completed, the fresh issue size will be reduced, the company added.

Funds utilities

The proceeds from its fresh issuance worth ₹42 crore will be utilised for the repayment or prepayment of borrowings, certain borrowings for the company. An additional ₹72 crore would be used for investment in product development, investments in technology and other growth initiatives while ₹30 crore would be deployed for strategic investments and acquisitions and general corporate purposes.

Founded in 2012 by Aneesh Reddy Boddu and Krishna Mehra, the company has a diversified product suite and technology platform. The company said it has served more than 250 brands across more than 30 countries including India, the US, Singapore and the UAE.

Its customers and brands are diversified that include businesses engaged in apparel, footwear, supermarkets, conglomerates, manufacturing and electronics, pharmacy and wellness, fine dining and QSR, luxury and jewellry, entertainment, travel and hospitality.

Its potential competitors include mid-market independent software vendors such as TADA, COMO, and technology giants such as Oracle and SAP. The company’s revenue from operations stood at ₹114.9 crore for fiscal 2021, while its net profit was ₹16.94 crore for the same period. For the quarter ending June 2021, revenue from operations was ₹33.16 crore and net profit was ₹2.53 crore.

ICICI Securities Ltd, Kotak Mahindra Capital Company Ltd and Nomura Financial Advisory and Securities (India) Private Ltd are the book running lead managers for the proposed issue.

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