Studd Accessories is the world’s largest maker of helmets and caters to both automotive and industrial sectors. The company’s revenue growth has been consistent and as India grows more safety conscious, the demand for helmets can only increase.
About the company
Studds Accessories Limited is the world’s largest two-wheeler helmet manufacturer in terms of volumes. The company claims a 25% market share in India and has two manufacturing facilities in Faridabad, Haryana with production capacity of 6.12 million.
The flagship brands of the company include Studds and SMK with availability in more than 21 countries. The company launched premium helmet brand‘SMK’ in 2016, which has emerged as the leading brand with the largest market share in the premium two-wheeler helmet segment in India. The range of products also include two-wheeler lifestyle accessories such as two-wheeler luggage, gloves, helmet security guards, rain suits and eye wear.
Going forward, the company will enter into a new product segment, i.e., bicycle helmets. It is planning to set up two new plants, one, for expansion of the current line of motorcycle helmet and accessories in the coming years, and the other for production of bicycle helmets. The company aims to double its manufacturing capacity to 13.5 million helmets and motorcycle accessories(12 million motorcycle helmets & accessories and 1.5 million bicycle helmets) in the coming years.
The company also entered into agreements for supply of helmets and two-wheeler lifestyle accessories with two-wheeler OEMs such as Honda Motor India Private Limited, Hero Motorcorp Limited, Suzuki Motorcycle India Private Limited and UM Lohia Two Wheelers Private Limited. All the helmets supplied to the two-wheeler OEMs are under joint branding.
IPO Proceeds Usage
Part-financing the motorcycle helmet manufacturing facility and part financing the bicycle helmet manufacturing facility; both situated in Faridabad.
Company believes that listing of company will enhance its visibility and brand image among existing and potential customers.
Fresh issuance of shares worth Rs 98 crore besides an offer for sale of 39.39 lakh equity shares by promoters Madhu Bhushan Khurana and Sidhartha Bhushan Khurana, and other existing shareholders.
Latest Updates
The company filed its draft IPO prospectus on 27th August 2018, at an estimated valuation of Rs 1850 Cr.
The company has received markets regulator Sebi’s approval to float an initial share sale. The company had filed its draft papers with the markets regulator in August seeking its clearance for the initial public offer(IPO), obtained Sebi’s observations on December 14.
Edelweiss Financial Services and IIFL Holdings are the merchant bankers managing the IPO.
About the Industry
India is the largest two-wheeler market of the world. Two-wheelers are most popular vehicles in the Indian automobile industry. Asia Pacific market is projected to be the fastest growing market due to the production of bikes at affordable prices followed by Europe due to the continuous increase in the motorcycle permits in European countries.
A growth in the helmet market is supported mainly by an increase in the sales of two-wheelers. There is also a very large replacement market for helmets in India as the consumer changes his or her helmet after 3 to 5 years of use.
Mandatory use of Helmets - In India, increasing number of two-wheeler accidents have compelled the government to make use of helmets compulsory by both rider and pillion.
Mandatory Approvals - To make helmets safer for the riders, and reduce the number of road fatalities, the government has planned to make it compulsory to have BIS certification. Currently, 50% of helmets used by riders are without ISI marks.
Helmet market in India is estimated at ₹13,950 million and the domestic demand for two-wheeler helmet stands at 19.32 million units for Fiscal 2018. Studds, Vega and Steelbird are top three players in two-wheeler helmet industry with a collective share of over 48% and Studds being the largest brand in the segment.
Strict enforcement of laws and state government mandate for the pillion riders to wear helmets ensure high demand for helmets in Northern and Southern India. In western region, the implementation of laws is comparatively weaker.
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About the company
About the Industry
Company Financials