He said the public offering will be largely intended to get investors out, adding that the company has no pressure to raise funds through private equity or initial public offerings (IPOs) in the near term because it has good capitalization in terms of future expansion plans.
“We will start preparations as soon as possible within 18-24 months. It’s a good idea to prepare for an IPO and then go to the market at the right time,” Balakrishnan told Mint In the interview.
If everything goes as planned, Duroflex will likely be the second company in the field in 2016 after its bigger rival Sheela Foam, the manufacturer of Sleepwell and Kurlon mattresses. Durroflex also competes with other players like Wakefit, Sleep Company and SleepyCat.
In 2023, Sheela Foam acquires 94.6% of Kurlon Enterprise Ltd (KEL) at a stock valuation price ₹2.15 billion, Furlenco’s 35% share of Furlenco is used for cash considerations ₹3 billion. The company’s stock has lost more than a quarter of its year-to-date, closed ₹On Thursday, there were 708 stock exchanges nationwide.
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Duroflex raised $60 million from investment firm Norwest Venture Partners (Douroflex and Sleepyhead) for the last time, with a valuation of $312 million from investment firm Norwest Venture Partners, according to market intelligence provider Tracxn. Prior to that, it raised $22 million in growth capital from lighthouse funds in 2018. The company is primarily a promoter-led entity with a private equity fund holding a 33.4% stake.
Balakrishnan explained that the company has now made full use of capital for growth, expansion, investment behind talent and increasing retail footprint. Duroflex has been focusing on profitability with lasers for the past two fiscal years to ensure its expansion and growth plans can come from internal accruals.
In fiscal year 2024 (FY24), the company reported consolidated operating income ₹10.95 million, compared to ₹FY105.7 billion FY23. It released profits ₹112 million, loss ₹Fiscal Year 1.547 billion Fiscal Year 23. The company also made profits in fiscal 25, but did not disclose the data.
“In terms of profitability, we have seen a significant shift last year. It is largely a function of making sharp choices in segments, channels and product types. “We have reevaluated our priorities, focus and non-focus areas,” he said. As we continue to invest in marketing, we also look closely at our overall cost structure and try to eliminate or reduce those who don’t add to the business. ”
In 2017, Duroflex launched another car (Sleepyhead) within the group, which caters to the growing demand for mattresses online, especially among first-time consumers. The vertical focuses on young, digitally local millennials and Gen Z who are now entering the workforce.
“We firmly believe that the two brands of games are needed to address different consumer groups, basic age, profile, psychology and attitudes. From this perspective, both brands have different main prospects, so the total addressable market (TAM) is the case,” Balakrishnan said.
About seven years later, Sleepyhead decided to abandon its direct-to-consumer strategy by opening three new stores in Bangalore. It expects three more stores in the coming months. Balakrishnan said it will also evaluate other metropolis opening similar stores after the company has established a significant business in the Karnataka capital city.
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Heambhead’s products, prices and experience are different from those of Duroflex, but the entire backend of both departments is synergistic to save higher costs. Currently, the overall revenue of Duroflex Group is about 10-15%.
Devangshu Dutta, CEO of consulting firm Third Vision, also stressed that older companies need to update their products, brands and communications for the younger, digitally friendly generation.
“Newer competitors have not yet penetrated cities where older people already have existence, which provides older companies with at least some opportunities to refresh their business and retain their territory,” he said.
Despite growing competition in the field, he believes that as more young people are in cities far away from their parents’ residences, market opportunities are also expanding as they move into their careers.
This creates expanding opportunities for furniture, home decor, home utilities and furniture companies. “The short-term economic cycle may cause consumers to tighten their wallets and delay buying, but the broad trend is growth,” Duta added.
However, Sleepyhead is a late entrant to offline expansion, as many peers such as Wakefit and Sleep Company already own more than 100 stores. “We are very cautious about expanding retail. For wrong locations or wrong business models, it may eliminate profitability, so we took some time to patiently evaluate and then do this strategy,” Balakrishnan said.
He added that most companies are somewhat cautious in their development after the initial phase of expansion, because the operating costs of running a store are high.
Balakrishnan also highlighted a similar expansion plan for Duroflex, which earned most of its revenue from mattresses and foam, followed by furniture and other accessories. “While we are expanding a little slower this year to focus on profitability, we plan to significantly increase our footprint and double the eye on those geographical locations that are strategic to us over the next 9-12 months.”
Although it is a pan-Indian brand, the company has earned about 65% of its revenue from the southern part of the country, the largest area in the entire comfort solution category.
Care Edge Ratings said in a November report that it has a strong brand positioning and a growing operational scale and a comfortable risk profile will keep Duroflex in good shape for future growth.
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Founded in 1963 by the late PC Mathew and George L. Mathew, the company has a massive distribution network with over 2,000 dealers nationwide, with its mattress, furniture and accessories division, as well as approximately 190 dealers and 100 distributors nationwide for its foam products.
