The maiden initial public offering (IPO) of leading footwear brand Campus Activewear continues to garner decent response from investors as the offer has subscribed 51.71 times, on April 28, the final day of bidding. The issue was opened on April 26.
Investors have put in bids for 174.02 crore equity shares against Campus Activewear's offer size of 3.36 crore equity shares.
Qualified institutional investors showed strong interest in the IPO as their reserved portion was subscribed 152.04 times, followed by non-institutional investors who bid shares 22.25 times the allotted quota.
Retail investors bought 7.68 times the shares of the reserved quota while the employees portion was booked 2.11 times.
An aspirational Indian brand in footwear category, which caters to the economic to mid premium category of footwear, intends to mobilise nearly Rs 1,400 crore through its public offer. Of which it already mopped up Rs 418.3 crore through anchor book on April 25.
The IPO is entirely an offer for sale by investors and promoters, hence the company will not receive any money from the offer for sale issue. The price band is Rs 278-292 per share.
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Over the last decade, it has grown its volumes at around 20 percent CAGR. "Replicating a similar growth trajectory would be a critical factor in sustaining premium valuations. At the upper price band, the company is valued at 8x market cap/sales and around 93x P/E (price-to-earnings) on TTM basis," said ICICI Direct.
The brokerage assigned a subscribe rating given its niche positioning in a fast growing segment, which would enable it to deliver sustainable profitable growth.
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Campus has a pan-India trade distribution network with over 425 distributors servicing over 19,200 retail touch points (major presence in the northern region). It has around 17 percent market share in branded sports and athleisure footwear in India and is the largest player in terms of volume (13.6 million pairs).
The company registered a healthy revenue CAGR of around 20 percent in FY18-20 with average EBITDA margins of around 18 percent. Capital efficient business model translates into an average return on capital employed of around 21 percent, said ICICI Direct.
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