Helmets manufacturer Studds Accessories files second time IPO papers with SEBI

Studds Accessories Limited, considered as India’s largest two-wheeler helmet manufacturer, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) once again after the crucial efforts of about seven years. This marks the company’s  second attempt to mark the public debut after a previously filed proposal in 2018, which was not accomplished. Having this fresh filing, Studds Accessories is looking to leverage the developing and growing  demand for top class safety helmets and two-wheeler accessories in India and abroad.

Background of Studds Accessories

Founded in 1983, Studds Accessories Limited has set up itself as a leading call in India’s helmet industry. The enterprise operates under two manufacturers—Studds and SMK Helmets, catering to a huge range of customers throughout price points. With a presence in over 40-70 countries, Studds has become synonymous with extremely good helmet quality that meet global protection and safety requirements.

Studds Accessories is supported by 4 latest production facilities located in Faridabad and Haryana. The company’s product portfolio consists of quite a few helmets together with open-face, full-face, flip-up, and modular helmets, along with more than a few motorcycle add-ons, making it a one-stop solution for safety tools in the two-wheeler segment.

Second Attempt at IPO Listing

Studds Accessories had previously filed draft papers with SEBI in 2018, seeking to raise ₹98 crore through a primary share issuance along with an offer to sell up to 39.4 lakh shares. However, the proposal was not executed. With its latest filing, the company is now aiming for a successful listing in 2025.

The corporation is now making another attempt, banking on India’s increasing two-wheeler sales that is significantly experiencing upward push and developing recognition around road safety and self protection. The fresh IPO filing aims to raise capital for business enterprise expansion plans, and a certain portion allocated to setting up new manufacturing units, and strengthening its market presence.

IPO Details: A Complete Offer for Sale (OFS)

This time the Studds Accessories IPO would be a complete Offer for Sale (OFS) where the promoter group and other shareholders plan to sell up to 77.9 lakh shares. Promoter shareholders participating in the sale include:

• Madhu Bhushan Khurana

• Sidhartha Bhushan Khurana

• Chand Khurana

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Since the IPO is an OFS, Studds Accessories will not receive any proceeds from the offering. The funds raised will go directly to the selling shareholders. IIFL Capital Services and ICICI Securities are the lead managers for the public issue.

Market Leader in Two-Wheeler Helmets

Studds Accessories dominates India’s two-wheeler helmet market in phrases of sales for FY23 and is recognized globally as the biggest two-wheeler helmet manufacturer in order of volume for the year 2024, in accordance with a CARE Report. The company has nearly 50 years of experience in designing, manufacturing, advertising and marketing, and selling two-wheeler helmets under its ‘Studds’ and ‘SMK’ manufacturers brands, together with a number of accessories which includes:

• Two-wheeler luggage
• Gloves
• Helmet locking devices
• Rain suits
• Riding jackets
• Eyewear
  

Competitive Edge and Industry Position

Studds Accessories’ leadership in the Indian two-wheeler helmet segment is supported by its vast distribution network, innovative product offerings, and global reach. According to the CARE Report, its dominance is driven by:

• Superior product quality and safety standards

  
  

• Strong brand recognition in domestic and international markets

  
  

• A wide range of helmets catering to different price points and customer preferences

Studds Accessories competes intense rivalry with well-known and prominent players like Steelbird Helmets, Vega Helmets, and LS2 Helmets in the Indian market. However, Studds’ significant manufacturing capacity, wide variety product portfolio, and strong brand reputation give it a competitive aspect.

Financial Performance and Growth Prospects

Studds Accessories reported and presented a revenue of ₹285 crore and a net profit of ₹33 crore for the six months ending September 2024, reflecting strong operational overall performance and growing surge and demand for its merchandise. The enterprise’s consistent financial increased growth and expansion into worldwide markets position it significantly as a leader  for future growth.

Strong Export Presence and Brand Expansion

The SMK other brand, introduced in 2016, has been successfully marketed both in India and internationally. As of December 31, 2024, Studds and SMK brands are sold in over 70 countries. The organisation additionally manufactures helmets for Jay Squared LLC, which can be offered under the "Daytona" brand in the US, and for O'Neal, providing markets across Europe, the United States, and Australia.

Use of IPO Proceeds

The proceeds from the IPO might be generally used for:

Expansion of Manufacturing Capacity: Studds plans to install new manufacturing strains to fulfill the rising demand for its products.

Investment in R&D and Innovation: The business enterprise targets to expand advanced safety capabilities and enhance product design to attract premium clients.

​Strengthening Distribution Network: Studds will focus on increasing its home and worldwide distribution network to reinforce marketplace penetration.

Debt Repayment and Working Capital Requirements: A part of the price range might be allotted to lessen the business enterprise’s debt and manage its operational expenses correctly.

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Industry Trends Favoring Studds Accessories

The Indian two-wheeler market continues to grow, with annual income crossing 15 million gadgets in recent years. Additionally, rising consciousness about street protection and government projects to put in force helmet utilization have further boosted demand for brilliant helmets.

The premium helmet section, where Studds’ SMK Helmets play a key function, is also witnessing extended traction as clients are seeking stylish and advanced feature, characteristic-rich, and protection-compliant helmets. This trend, blended with a developing consciousness on personal safety submit-pandemic, positions Studds Accessories favorably for future increase.

Challenges and Risks

Despite its strong market function, Studds Accessories faces certain demanding situations, such as:

1.   Intense Competition: The helmet enterprise is exceptionally competitive, with several local domestic and global manufacturers vying for market share.

2.  Fluctuations in Raw Material Prices: Any increase in the cost of raw materials should affect income margins.

3.  Regulatory Compliance: Studds ought to follow stringent safety and quality policies, both in India and abroad, which may grow operational costs.

Future Outlook for Studds Accessories

With India’s developing emphasis on avenue safety and the rising adoption of -wheelers in urban and rural areas, the demand for remarkable helmets is predicted to upward push. Studds Accessories, with its installed emblem and varied product services, is properly-positioned to capitalize on this growing market.

The organisation’s second attempt to increase capital through an IPO reflects its confidence in future boom potentialities. By leveraging the proceeds from the IPO, Studds aims to solidify its management position in the helmet enterprise, make its worldwide footprint bigger, and invest into modern cutting edge protection technology.

Conclusion

Studds Accessories’ decision to refile its IPO papers with SEBI underscores its ambition to capitalize on India’s booming helmet industry. Having and as given its a strong marketplace presence along with growing demand for top rate premium helmets, and a focus on innovation and expansive global footprint, Studds is well-poised to provide long-term value to its investors. The listing is expected to strengthen Studds' position as a dominant player in the two-wheeler helmet market while providing avenues for future growth and innovation.