IPO-Bound Pepperfry Shifts Focus On Finding A Nook In Your House In 24 Hrs

Photo by César Couto on Unsplash

Furniture marketplace Pepperfry, which is gearing up for a public listing, has announced the launch of a ‘world-first’ 24-hour furniture delivery service in Mumbai, Delhi-NCR, and Bangalore. 

The e-commerce furniture and home goods company is also mulling manufacturing its own furniture and looking to file DRHP in the next few months after raising $250-300 million through IPO.

The Levers

So, furniture is a heavy ticket-size item. The company has recorded an impressively low damage rate of 1%, via customized handling tools, and efficient installation services. This, along with its largest warehousing network in Mumbai, Gurugram, and Bangalore, will be leveraged to deliver furniture to customers by the next day – that is, if they place their orders by 9 PM. 

Pepperfry has also recently been deepening its offline presence in both large cities and smaller towns in an attempt to be closer to consumers. 

The Time Is Ripe

Ashish Shah, co-founder, and COO unraveled the company’s plans to file its draft red herring prospectus (DRHP*) in the first quarter of the next fiscal for an initial public offering (IPO) in which it will seek to raise $250-300 million. 

Using these funds, Pepperfry will tap into new markets and categories while focusing on inorganic growth in the manufacturing and B2B segments.

Volatile Waters

Pepperfry reported a revenue drop of 10% in fiscal 2021 at around Rs.220 Cr due to the Covid-19 pandemic. A good recovery in sales is expected to close the current financial year with a 40-45% growth in revenue. 

The company’s gross sale is about 4 times its revenue, said CEO and co-founder Ambareesh Murthy.

*For the unaware, a Draft Red Herring Prospectus or DRHP is filed and submitted when a company plans to raise money (for example: float an IPO) from the public by selling its shares to investors. Also known as an ‘offer document’ or ‘preliminary registration document,’ it is filed with the market regulator SEBI (Securities and Exchange Board of India).

Additionally, the issuer firm allows potential investors to make an informed decision and analyze its financials, issuance objectives, business operations, promoter holding, market valuation, and other important information through DRHP.

Too long? Here’s a one-liner: Pepperfry plans to manufacture its own furniture and starts 24-hour furniture delivery using its Big-Box supply chain; to file DRHP in the next few months and mulls raising $250-300 mn through IPO.

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