RK Swamy Gains SEBI Approval for IPO: Set to Raise Rs 215 Crore

10 Jan 2024 , 10:21 AM

Marketing services provider RK Swamy, headquartered in Tamil Nadu, has secured approval from the Securities & Exchange Board of India (SEBI) for its proposed initial public offering (IPO). As the largest Indian majority-owned integrated marketing services provider, RK Swamy offers a comprehensive solution encompassing creative, media, data analytics, and market research services.

The IPO comprises a combination of a fresh issuance of shares totaling Rs 215 crore and an offer for sale (OFS) of 87 lakh equity shares by promoters and investors. Promoters Srinivasan K Swamy and Narasimhan Krishnaswamy will be divesting 17,88,093 equity shares each through the OFS. Investors Evanston Pioneer Fund LP and Prem Marketing Ventures LLP will sell 44,45,714 and 6,78,100 equity shares, respectively, via the OFS.

The promoters currently hold an 84.44% stake in the company, while the remaining 15.56% is owned by the selling shareholders. SEBI issued an observation letter on January 5, 2024, indicating approval for the RK Swamy IPO, which was filed on August 11, 2023. According to SEBI’s guidelines, the company is now eligible to launch its public issue within a year from the date of allotment of the observation letter.

RK Swamy, established by the late founder RK Swamy, a prominent figure known as the ‘Grand Old Man of Indian Advertising,’ began its journey with RK SWAMY Advertising Associates in Chennai in 1973. Claiming a position among the top 10 diversified integrated marketing communications services groups in India, RK Swamy has served leading companies like Aditya Birla Sun Life AMC, Cera Sanitaryware, Dr Reddy’s Laboratories, Havells India, Mahindra & Mahindra, Tata Play, and Union Bank of India, among others.

The IPO funds will be allocated for various purposes, including Rs 87 crore for working capital requirements, Rs 10.98 crore for establishing a digital video content production studio, Rs 33.34 crore for investment in IT infrastructure development, and Rs 21.7 crore for setting up new customer experience centers and computer-aided telephonic interview centers. The remaining funds from the fresh issue will be utilized for general corporate purposes.

On the financial front, RK Swamy reported a consolidated net profit of Rs 31.26 crore for the fiscal year ending March FY23, up from Rs 19.26 crore in the previous year. The consolidated revenue from operations during the same period increased to Rs 292.6 crore, compared to Rs 234.4 crore.

SBI Capital Markets, IIFL Capital Services, and Motilal Oswal Investment Advisors have been appointed as the merchant bankers for the IPO.