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Informist, Tuesday, Sept. 29, 2026

NEW DELHI – Technopaints and Chemicals Ltd. Monday filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offer comprising a fresh issue of shares worth INR 3.25 billion and an offer for sale of shares worth INR 1.75 billion. Each share will have a face value of INR 5.

Under the offer for sale component, promoters Akuri Srinivasa Reddy and A. Sandhya will offload shares worth up to INR 900 million and INR 300 million, respectively. Among the promotor group entities, K. Sivareddy will part with shares worth up to INR 40 million. In the same category, Akuri Sakesh Reddy and Akuri Deepthi will each sell shares of up to INR 50 million. As many as five individual shareholders - Satyanarayana Reddy Akuri, Anil Kondoth, Dantuluri Krishna Harish Varma, Venkata Lakshmi Narasimha Murthy Chilla, and Arjun Nagulapally – will offload shares worth up to INR 402 million on a cumulative basis.

The company aims to use INR 1.49 billion of the net proceeds of the offer to fund capital expenditure towards setting up a greenfield paints manufacturing and innovation facility and INR 799.86 million for partly funding incremental working capital requirements. The rest will be channeled towards general corporate purposes.

Technopaints and Chemicals is an integrated paints solutions provider, spanning manufacturing, sale, and application of paint products through a business-to-business project-based model. It is primarily involved in the execution of turnkey paint supply and application projects for real estate developers and builders across the residential, commercial, institutional, healthcare, education, and industrial end-use segments, including projects under various government programmes. As per the restated financial statement, the company recorded a net profit of INR 377.75 million for 2025-26 (Apr-Mar) on revenue of INR 3.51 billion. As of Jul. 31, the company's aggregate order book stood at INR 9.95 billion.

Outlining the risk factors, Technopaints and Chemicals said it derived a brute majority of its revenue from turnkey paint projects in Telangana –- 99.59% for FY26, 97.88% for FY25, and 98.77% for FY24. Any unfavourable developments in the state could be detrimental to its business. Further, the company's inability to secure, execute, or complete such turnkey projects could materially and adversely affect the financials. The paint solutions provider manufactures all its products at two manufacturing facilities located in Telangana, and the proposed new manufacturing facility will also be located in the same state. 

Technopaints and Chemicals is also dependent on its top 10 customers who contributed 81.90%, 64.62%, and 56.96% of the company's evenue from operations for FY26, FY25, and FY24, respectively. The company does not have long-term agreements with its customers and they are under no obligation to award future projects to the company. The company also lacks long-term agreements with its suppliers. The top 10 suppliers accounted for 60-70% of its total purchases in the last three financial years. The South India-based caompany operates its turnkey paint projects business substantially on a fixed-price basis, and any increase in raw material prices, cost overruns, delays, or deficiencies in execution may have a material adverse effect on the business. As per the company, it has significant working capital requirements and any interruption in sufficient cash flow, or in accessing suitable financing may have an adverse effect on the business.

Outstanding legal proceedings involving the company include a criminal complaint from 2014 against the company, its promoters, and K. Siva Reddy in relation to dishonouring of cheques aggregating INR 910,000. There are five direct tax matters involving INR 86.80 million, among others. 

Technopaints and Chemicals owes INR 1.33 billion to a total of 275 material creditors; micro, small, and medium enterprises; and other creditors.

The offer is being made through the book building process wherein not more than 50% of the net offer will be reserved for qualified institutional investors and at least 15% will be set aside for non-institutional bidders. Further, at least 35% will be allocated to retail investors. Anand Rathi Advisors Ltd. is the book-running lead manager for the exercise and KFin Technologies Ltd. is the resgistrar. The shares are proposed to be listed on the National Stock exchange and BSE. (Shakshi Jain)

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Edited by Avishek Dutta

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