Sleepwell is the name that comes to our mind whenever we think about sleeping mattresses. Well, who doesn't know this brand that has been delivering premium mattresses to every household? Sheela Foam Limited is the company behind the brands like Sleepwell, feather foam, and Lamilex. If we talk about Sleepwell, how can we forget about its biggest rival, Kurlon. Both brands have been competing against each other for years.
In the deal of Rs 2000 crore, Sheela Foam acquired Kurlon and expanded its market share in the Indian organised mattress market. In this blog, we will discuss the key highlights of the deal and how it will change the Indian mattress market.
Key Highlights Of The Deal Between Sheela Foam & Kurlon
The acquisition deal between Sheela Foam and Kurlon Enterprise Ltd came when Kurlon was on the verge of losing its market share. As per the sources, the amount disclosed by the parent company of Sleepwell for this deal is Rs 2000 crore, in which it acquires all stakes of Kurlon.
Talking about Kurlon, an unlisted company, sells branded mattresses and has a presence in different states of India. With over 10,000 dealers and 72 branches, Kurlon was one of the biggest competitors of Sheela Foam. Here are the key highlights of this deal between Sheela Foam and Kurlon:
- It is an entity-selling deal in which Sheela Foam acquired Kurlon's complete market shares. However, it is vital to know that Kurlon's unlisted shares are traded in the grey market. The acquisition news impacts the Kurlon share price as it is merged with Sleepwell, a listed company.
- In this deal, Sheela Foam's combined entity has more than 50% of the market share in India's organised mattress space. After this acquisition, Duroflex is now India's largest mattress maker. According to various sources, Sleepwell's other competitors raised funds from private equity firms recently.
- The complete details of this acquisition deal are not yet disclosed by any of the officials of the company. However, this decision of Kurlon is the result of the step taken by its Chairman and MD Sudhakar Rai in which he decided to hand over his reign due to tangling market position.
Effects Of This Deal On Sheela Foam's Shares
The acquisition deal between Sheela Foam and Kurlon results in the performance of Sheela Foam in the market. With this deal, Sleepwell will have more than 50% of the market share in India's organised mattress market. Before this deal, Sheela Foam had 20-30% of the share and competed with rivals like Kurlon, Duroplex, Springwell, etc.
As a result of this acquisition, Sleepwell will have entities and a network of Kurlon Enterprises Ltd. The other effect of this deal is seen in Sheela Foam's shares in the stock market. You need to know that Sleep Foam is a listed company, while Kurlon is an unlisted company. There are a large number of retail investors who buy Kurlon Enterprises Ltd unlisted shares and depend on its market performance.
The news of the acquisition positively affected Sheela Foam's share as it rose to 5% and touched the mark of Rs 1,338. It has a previous higher price of Rs 1,296.90 on the BSE. However, Kurlon Enterprise Limited unlisted shares also fluctuated at the time of acquisition deal. The price of its Pre-IPO stocks dropped to its lowest, Rs 286. Taking account of its monthly performance, it progressively increases and shows steady growth. The current price of the unlisted share is Rs. 560.
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How did the Indian Mattress Market Change After this deal?
There is the biggest change seen in the Indian mattress market after the deal between Sheela Foam and Kurlon Enterprises Ltd. The market share of Sheela Foam is expected to surge by 10% as it will benefit from Kurlon's established customer segmentation. As we mentioned, the overall market share of Sheela Foam will be more than 50% in India's organised mattress space.
The other big change we can expect is the Kurlon share price. It is difficult to say whether Sheela Foam merges Kurlon into Sleepwell completely. In the next few years, the Indian mattress segment will undergo a big change as Sheela Foam will remain India's largest mattress manufacturer. Sheela Foam is planning to utilise Kurlon's PAN India presence for expanding its manufacturing units. Ultimately, we can also expect Kurlon to be listed on the stock market with Sheela Foam or operate as a joint entity on BSE and NSE.
Is It Still Beneficial To Buy Kurlon Enterprises Ltd Unlisted Shares?
When Kurlon was merged with Sheela Foam, it was difficult for retail investors to know the company's future. Over the years, Kurlon unlisted shares have been widely traded in the Pre-IPO market. There is an insecurity among investors about whether buying Kurlon unlisted shares is still beneficial. Well, that's the biggest dilemma every investor faces right now.
You can still invest in Kurlon unlisted shares as it remains available to investors. There are various benefits to buying Kurlon Enterprises Ltd unlisted shares as there are huge chances that Sheela Foam will launch its IPO soon.
If you invest in Kurlon Ltd unlisted shares, which are less risky, you can get indirect benefits from the performance of Sheela Foam shares. Moreover, Kurlon share price has remained steady in the past few months and is expected to go higher in the future.
So, it is still beneficial to buy Kurlon Enterprises Ltd unlisted shares. Stockify allows retail investors to buy unlisted shares from the comfort of their homes. You can easily check the price and financial performance of Kurlon on our site. Apart from it, we have other trending unlisted shares of companies like OYO, Tata Technologies, HeroFincorp, and many more.
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