Shankara Building IPO: Private Equity Firm Looks To Make Four Times Its Investment 

Shankara Building Products Ltd.’s initial public offering (IPO) opened on Wednesday, March 22. The company aims to raise Rs 350 crore through a mix of offer for sale and fresh issuance at a price band of Rs 440-460 per equity share. Fairwinds Trustees Services Private Ltd., an investment arm of Reliance Capital Ltd., will be selling 78 percent of its 35 percent stake in the company.

Around 13 percent or Rs 45 crore of the IPO proceeds will be used to retire high cost debt and bulk of the proceeds will go to the private equity partner, Fairwinds Trustees Services, said Sukumar Srinivas, Managing Director, Shankara Building Products, in an interview to BloombergQuint.

Fairwinds Trustees had invested around Rs 80 crore in the company and is looking to earn around Rs 263 crore from this stake sale, according to BloombergQuint’s calculation.

The company currently operates 100 retail stores under the ShankaraBuildPro brand and also manufactures home improvement products like roof sheets and water tanks.

The company has already mopped up Rs 103.5 crore from two of its anchor investors - Franklin India Smaller Companies Fund and DSP Blackrock Core Fund.