RK Swamy Receives SEBI Approval for IPO, Prepares to Raise Funds for Expansion

Tamil Nadu-based marketing services provider RK Swamy has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its fundraising plans via an initial public offering (IPO). This development marks a significant milestone for the company, which offers a comprehensive range of integrated marketing services, including creative, media, data analytics, and market research solutions.

The RK Swamy IPO will consist of a combination of fresh share issuances worth 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. Among the investors participating in the OFS, Evanston Pioneer Fund LP will sell 44,45,714 equity shares, while Prem Marketing Ventures LLP will offload 6,78,100 shares.

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Currently, the promoters hold an 84.44 percent stake in the company, with the remaining 15.56 percent being held by the selling shareholders. The SEBI has issued an observation letter for the RK Swamy IPO, which was filed on August 11, 2023, signaling that the company can launch its public issue within a year from the date of allotment of the observation letter.

Established by the late founder RK Swamy, who is widely recognized as the ‘Grand Old Man of Indian Advertising,’ the company has grown to become one of the top 10 diversified integrated marketing communications services groups in India. RK Swamy has a rich history of over five decades and serves a prestigious clientele, including Aditya Birla Sun Life AMC, Cera Sanitaryware, Dr. Reddy’s Laboratories, Havells India, ONGC, Tata Play, Ultratech Cement, and Union Bank of India, among others.

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The funds raised through the IPO will be allocated for various purposes, including Rs 87 crore for working capital requirements, Rs 10.98 crore for setting up a digital video content production studio, Rs 33.34 crore for investment in IT infrastructure development, and Rs 21.7 crore for establishing new customer experience centers and computer-aided telephonic interview centers. The remaining proceeds 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 2023, a significant increase from Rs 19.26 crore in the previous year. The company’s consolidated revenue from operations during the same period also saw substantial growth, reaching Rs 292.6 crore compared to Rs 234.4 crore.

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SBI Capital Markets, IIFL Securities, and Motilal Oswal Investment Advisors are the merchant bankers overseeing the RK Swamy IPO, which is expected to generate significant interest from investors looking to participate in the Indian marketing services sector.

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