Credo Brands eyes premium positioning of Mufti brand, sets IPO price band at Rs 266-280 per share

Talking about what sets them apart in a competitive market, Kushlani said that it is product differentiation. The company is positioning itself as a bridge between consumers, who want to move to premium brands

Mumbai-based Credo Brands Marketing Limited would not play into the mass segment with its Mufti brand. The company have seen enough headroom of growth in this brand, which is positioned in the premium to mid-premium segment.

“We should be able to maintain similar growth rates going forward. We don’t see going into the mass market with this brand for sure,” said Kamal Khushlani, Chairman and Managing Director.

On December 13, the company fixed the price range at Rs 266-280 per share for its initial public offering (IPO), which is valued at Rs 550 crore. The issue is scheduled to be available for subscription from December 19 to December 21, as officially disclosed by the company. At the lower and the upper end of the price band, the IPO is expected to fetch Rs 522 crore and Rs 550 crore, respectively. The company will launch its anchor book for a day on December 18.

Also read: Mufti Jeans maker Credo Brands Marketing IPO opens on Dec 19, with only OFS component

Talking about going public in a competitive apparel market, Khushlani said “The IPO is a medium to help our angel investors exit. We saw that we are growing at a substantial rate and the IPO will increase our visibility.”

The company focuses on the design of products and outsources the manufacturing of products. With an asset-light business model primarily due to outsourcing of manufacturing operations, it has recorded healthy growth in financials with net profit growing by 117 percent year-on-year (YoY) to Rs 77.5 crore and revenue from operations rising 46 percent to 498.2 crore in the year ended March FY23.

The EBITDA (earnings before interest, tax, depreciation, and amortization) surged 72.3 percent to Rs 164 crore with a strong margin expansion of 500 basis points at 32.9 percent during the financial year 2022-23.

For the April-June quarter of the current financial year, i.e. Q1FY24, its net profit stood at Rs 8.57 crore on revenue of Rs 118.5 crore.

Talking about what sets them apart in a competitive market, Khushlani said that it is product differentiation. The company is positioning itself as a bridge between consumers, who want to move to premium brands.

As of September 2023, Credo Brands Marketing has established its footprint throughout India, spanning 1,807 touchpoints. These include 404 exclusive brand outlets, 71 large format stores and 1,332 multi-brand outlets.

DAM Capital Advisors, ICICI Securities, and Keynote Financial Services are acting as the book-running lead managers to the issue. Link Intime India is the registrar of the offer.