Founder Stack

Building materials platform Infra.Market could be heading to the public markets through a potential reverse merger with listed Shalimar Paints, which has approved a Rs 10,440 crore share-swap transaction involving Hella Infra Market, the parent company of Infra.Market. Shalimar Paints has approved a proposal to invest in the equity shares and compulsory convertible preference shares (CCPS) of Hella Infra Market through a swap based on the valuation of both companies. Under the proposed structure, Hella Infra Market may become an unlisted material subsidiary of Shalimar Paints. The company has also said its board is exploring the possibility of “unification” of the two entities at an appropriate stage, subject to applicable laws and the required approvals. While Shalimar has not formally called this a merger, the structure could potentially provide Infra.Market with a route to the public markets through an existing listed company. Under the proposed transaction, Shalimar Paints will issue up to 41.7 crore equity shares at Rs 85 each, amounting to around Rs 3,545 crore. The shares will be allotted to 185 investors through a preferential issue and will be issued for consideration other than cash. Shalimar will also issue up to 81.12 crore CCPS at Rs 85 each, worth around Rs 6,895 crore. These securities will also be issued for consideration other than cash. Together, the two proposed issues are worth around Rs 10,440 crore. Importantly, the Rs 10,440 crore figure is not a cash acquisition. Shalimar Paints is proposing to issue its own equity shares and CCPS as consideration for the investment in Hella Infra Market. The final swap ratio will be based on valuation reports of Shalimar Paints and Hella Infra Market. The proposed allotment includes several investors associated with Infra.Market. Aaditya Sharda and Souvik Sengupta, identified publicly as Infra.Market’s cofounders, are among the largest proposed recipients of the CCPS. Sharda is proposed to receive around 29.64 crore CCPS, while Sengupta is set to receive around 29.69 crore CCPS. Bizarro Advisory and Silverline Homes are also among the major recipients. On the equity side, the proposed allottees include Nithin Kamath, NKSquared, Ashish Kacholia, Silverline Homes and Trifecta Venture Debt Fund II, among others. The filing lists 185 investors for the proposed equity issue. For Infra.Market, the proposed transaction could offer an alternative route to the stock market instead of a standalone IPO. Shalimar Paints said the investment would combine its listed-market presence and manufacturing capabilities with Infra.Market’s pan-India scale across ready-mix concrete, aggregates, steel, tiles and other building products. Alongside the proposed share swap, Shalimar Paints has also approved a plan to raise up to Rs 1,000 crore through a qualified institutional placement (QIP). Unlike the Rs 10,440 crore share and CCPS issue, the QIP is a proposed fresh capital raise. Shalimar said the funds would p