New Delhi, Sept. 29 -- Two weeks after a wholly-owned subsidiary of Motilal Oswal Financial Services Ltd acquired shares worth Rs 100 crore ($11.2 million) in Kusumgar Ltd, the Mumbai-based engineered fabrics manufacturer has decided to tap the capital markets through an initial public offering (IPO).
On Saturday, Kusumgar filed its draft papers with the Securities and Exchange Board of India (SEBI) for a Rs 650 crore ($73.2 million) IPO. The proposed issue is entirely an offer for sale by the company's promoters, with no fresh issue component. This means that none of the IPO proceeds will be infused into the business. Instead, they will go to the promoters and the selling shareholders.
Earlier this month, a subsidiary of Motilal Oswal Financial Services had purchased 10.96 lakh compulsorily convertible preference shares and 16.44 lakh equity shares of Kusumgar. Motilal Oswal said this was a cash purchase as part of its treasury investment book, aimed at generating long-term stable returns.
In addition, investment firms White Oak Capital Management, Spark Capital and a few other institutional investors had also backed the company. According to the VCCircle report, the group collectively invested roughly Rs 200 crore ($22.66 million), with Spark Capital putting in about Rs 60 crore, and White Oak and others providing the remainder.
Founded in 1990, Kusumgar manufactures woven, coated, and laminated synthetic fabrics (engineered fabrics) used across multiple sectors, including aerospace and defence, outdoor and lifestyle, as well as industrial and automotive applications. These segments contribute 77%, 7%, and 15%, respectively, to its topline.
The company competes with listed peers such as Arvind, SRF, and Garware Technical Fibres. Between FY24 and FY25, Kusumgar's profit rose more than 32% to Rs 112 crore from Rs 84.4 crore, while revenue jumped more than 66% to Rs 779 crore from Rs 467.9 crore.
Published by HT Digital Content Services with permission from VC Circle.