Rs 10,440 Cr Share-Swap Deal Could Give Infra.Market a Backdoor Route to the Public Markets
Building materials platform Infra.Market could be heading towards the public markets through a potential reverse merger with listed Shalimar Paints, following approval of a proposed 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 share swap based on the valuation of both companies. Under the proposed structure, Hella Infra Market could become an unlisted material subsidiary of Shalimar Paints.
The transaction is still at the proposal stage and will require shareholder and regulatory approvals.
Rs 10,440 Cr Transaction Is Not a Cash Acquisition
Under the proposed arrangement, Shalimar Paints will issue up to 41.7 crore equity shares at Rs 85 apiece, amounting to approximately Rs 3,545 crore.
The shares will be issued to 185 investors through a preferential issue and will be allotted as consideration other than cash.
In addition, Shalimar Paints plans to issue up to 81.12 crore CCPS at Rs 85 each, valued at around Rs 6,895 crore.
Together, the proposed equity and CCPS issuance is worth approximately Rs 10,440 crore.
Importantly, the Rs 10,440 crore transaction does not represent cash being paid to acquire Infra.Market. Instead, Shalimar Paints will issue its own securities as consideration for the proposed investment in Hella Infra Market.
The final swap ratio will be determined based on valuation reports for both Shalimar Paints and Hella Infra Market.
Infra.Market Investors Among Proposed Allottees
The proposed transaction includes several investors associated with Infra.Market.
Its cofounders, Aaditya Sharda and Souvik Sengupta, are among the largest proposed recipients of the CCPS.
Sharda is proposed to receive approximately 29.64 crore CCPS, while Sengupta is set to receive around 29.69 crore CCPS.
Other major proposed recipients include Bizarro Advisory and Silverline Homes.
On the equity side, the list of proposed allottees includes prominent investors such as Nithin Kamath, NKSquared, Ashish Kacholia, Silverline Homes, and Trifecta Venture Debt Fund II, among others.
The filing lists a total of 185 investors for the proposed equity issue.
Potential Alternative to Infra.Market IPO
For Infra.Market, the proposed transaction could provide an alternative route to the stock market instead of pursuing a standalone initial public offering.
The potential structure would allow Infra.Market’s business to become part of a listed entity while giving its existing investors exposure to the listed company through Shalimar Paints’ securities.
Shalimar Paints has also said its board is exploring the possibility of “unification” of the two entities at an appropriate stage, subject to applicable laws and necessary approvals.
Although the company has not formally described the arrangement as a merger, the proposed structure could effectively create a route for Infra.Market to access public markets through an existing listed company.
Building A Larger Materials Platform
Shalimar Paints said the proposed transaction would combine its listed-market presence and manufacturing capabilities with Infra.Market’s pan-India scale across the building materials ecosystem.
Infra.Market operates across categories including ready-mix concrete, aggregates, steel, tiles, and other building products.
If completed, the transaction could significantly expand Shalimar Paints’ business profile, transforming it from a listed paint company into a broader building materials platform with Infra.Market as a major part of the combined business.
Shalimar Paints Plans Rs 1,000 Cr QIP
Alongside the proposed share-swap transaction, Shalimar Paints has also approved plans to raise up to Rs 1,000 crore through a Qualified Institutional Placement (QIP).
Unlike the Rs 10,440 crore securities issuance, the QIP will involve a fresh capital raise.
The company said the proceeds would provide growth capital and strengthen the enlarged company’s access to public markets.
The proposed QIP is therefore separate from the share-swap arrangement with Hella Infra Market.
Deal Still Requires Approvals
The transaction remains subject to several conditions, including shareholder and regulatory approvals.
The final valuation of both companies, the swap ratio, and the resulting ownership structure will also need to be determined before the transaction can be completed.
If approved and executed, the deal could become a significant development in India’s building materials sector, bringing Infra.Market closer to the public markets while simultaneously reshaping Shalimar Paints into a much broader construction and building materials platform.
For Infra.Market, the proposed reverse-merger structure could offer a potentially faster alternative to a traditional IPO, while giving investors access to a listed vehicle and combining its distribution scale with Shalimar Paints’ existing public-market presence.
