RK Swamy IPO: Price Band Fixed at Rs 270-288

Mumbai, Feb 28 (PTI) RK Swamy Ltd, the Chennai-based marketing communications major on Wednesday fixed the price band at Rs 270-288 per share for its Rs 423-crore Initial Public Offering (IPO), becoming the first in the category to go public.

The initial share sale will open for public subscription on March 4 and close on March 6. The bidding for anchor investors will open for a day on March 1, the company said in a statement.

The Rs 423.56-crore IPO comprises a fresh issue of shares aggregating up to Rs 173 crore and an Offer For Sale (OFS) of up to 87 lakh equity shares by selling shareholders worth Rs 250.56 crore at the upper end of the price band.

Those offering shares in the OFS are -- Srinivasan K Swamy, Narasimhan Krishnaswamy, Evanston Pioneer Fund LP, and Prem Marketing Ventures LLP.

Srinivasan K Swamy (Sundar Swamy) who is the chairman & managing director will be selling up to 17,88,093 shares through the OFS. Narasimhan Krishnaswamy or Shekar Swamy, who is the group CEO and whole time director, will offload up to 17,88,093 shares.

The brothers along with their families together own 86 percent of the pre-issue equity of the company which will come down to 66 percent post-issue, Sundar Swamy told PTI.

The brothers along with their families together own 86 per cent of the pre-issue equity of the company which will come down to 66 per cent post-issue, Sundar Swamy told PTI.

Chief financial officer Rajeev Newar said the external investors who will paring or exiting their stake are the US-based Evanston Pioneer Fund, which will be selling 4,445,714 shares. Pre-issue the fund owns 14.04 per cent and will retain only 4.04 per cent post-issue.

The other external investor is Prem Marketing Ventures, which will be selling its entire 1.56 per cent or 6,78,100 shares holding in the company through the OFS.

Both these funds entered the company in 2018 by investing in the erstwhile holding company of RK Swamy, Newar said.

Founded by the late RK Swamy, and recognized as the grand old man of Indian advertising, the company was initiated as RK Swamy Advertising Associates in Chennai in 1973.

The company claims to be one of the top 10 diversified integrated marketing communications services companies in the country and the largest Indians-owned in the country and boasts of a legacy spanning over five decades.

Some of its clients include HPCL, ICICI Prudential Life, Mahindra & Mahindra, ONGC, Royal Enfield, Tata Play, Ultratech Cement, and Union Bank of India, Aditya Birla Sun Life AMC, Cera Sanitaryware, Dr Reddy's, Fujitsu General, Havells India, Hawkins Cookers.

The proceeds from the fresh issue will used to fund working capital requirements (Rs 54 crore); funding capital expenditure for setting up a digital video content production studio (Rs 10.9 crore); funding investment in IT infrastructure of the company and its subsidiaries Hansa Research and Hansa Customer Equity (Rs 33.34 crore).

Funds will also be used to set up of new customer experience centres and computer-aided telephonic interview centres (Rs 21.73 crore).

The company said that investors can bid for a minimum of 50 equity shares and in multiples of 50 equity shares thereafter.

During fiscal 2023, one of India's pioneering advertising agencies RK Swamy released over 818 creative campaigns on behalf of clients across various media outlets, handled over 97.69 terabytes of data, and conducted over 2.37 million consumer interviews across quantitative, qualitative, and telephonic surveys.

The company posted a consolidated net profit of Rs 31.26 crore in FY23, up from Rs 19.26 crore in the preceding year. Consolidated revenue from operations rose to Rs 292.6 crore in FY23 from Rs 234.4 crore in the previous year.

SBI Capital Markets, IIFL Securities, and Motilal Oswal Investment Advisors are the book-running lead managers to the issue.