Sheela Foam gains 8% after possible news of an acquisition

Today shares of Sheela Foam Ltd have surged following news reports indicating its potential acquisition of rival company Kurlon Enterprise. According to the report, Sheela Foam may acquire 100% of Kurlon Enterprise in two tranches with a cash consideration of Rs 3,250 crore. The transaction is expected to be completed within the next few months. 

If the acquisition is successful, Sheela Foam’s market share in India’s organized mattress industry could increase from 20-25% to 35-40%. Sheela Foam currently dominates the north and west regions, while Kurlon dominates the south and east. The acquisition of Kurlon will assist Sheela Foam in expanding its market footprint across India.  

The report also suggests that the consolidated topline of Sheela Foam is estimated to receive an additional Rs 900 crore. Furthermore, this agreement would enable Sheela Foam to procure raw ingredients such as TDI (toluene di-isocyanate) at lower prices. The exchange has requested clarification regarding the potential acquisition.  

Yesterday Sheela Foam shares closed at Rs 1170.95 and today it opened at Rs 1175. During intraday trading, it reached a high of Rs 1270 marking an increase of 8.46%. The stock closed around 1213.50 reflecting a 3.63% increase. Sheela Foam’s 52-week high and low stand at Rs 1710 and Rs 905.05, respectively. BSE group ‘A’ stock has a market capitalization of around Rs 11,800 crore.  

The company has announced that its 51st Annual General Meeting will be held on July 18, 2023, via video conference. Additionally, the company has released its Annual Report for FY23.  

Sheela Foam Limited is a prominent player in India’s mattress and foam products industry. The Sheela group’s brands include SLEEPWELL – the flagship brand for mattresses, FEATHER FOAM and LAMIFLEX.