Mumbai-based Credo Brands Marketing, the Mufti Jeans maker, is going to be the third company launching an initial public offering (IPO) next week on December 19. Happy Forgings and RBZ Jewellers IPOs will also open on the same day. The price band will be announced on December 14.
The company will launch its anchor book for a day on December 18, while the public issue will be closing on December 21.
The maiden public issue comprises only an offer-for-sale (OFS) of 1.96 crore equity shares by the existing shareholders, and there is no fresh issue component by the company.
Promoters Kamal Khushlani and Poonam Khushlani will be selling 84.15 lakh equity shares in the OFS, while Sonakshi Khushlani and Andrew Khushlani — a part of the promoter group will be offloading 1.08 lakh shares each in the OFS.
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Public shareholders including Concept Communication, Bela Properties, Jay Milan Mehta and Sagar Milan will also be selling more than one crore shares via the OFS route.
Kamal Khushlani, his wife Poonam Khushlani, and children Sonakshi Khushlani and Andrew hold a 68.82 percent stake in the company. The remaining stake is held by public shareholders.
Sources familiar with the public issue told Moneycontrol that the total issue size may be in the range of Rs 500-600 crore.
The entire issue proceeds, excluding IPO expenses, will go to the selling shareholders and the organisation will not receive any money from the offer.
Credo, under its Mufti brand, is engaged in the retail sale of garments and accessories and sells products through a pan-India multi-channel distribution network with 1,807 touchpoints as of September 2023.
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According to the company's red herring prospectus, "61 percent of revenue came from exclusive brand outlets (EBOs) business, 2.5 percent from large format stores (LFSs) and nearly 18 percent via multi-brand outlets (MBOs), while online business contributed 14 percent to topline."
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 on-year to Rs 77.5 crore and revenue from operations rising 46 percent to 498.2 crore in the year ended March FY23.
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The EBITDA (earnings before interest, tax, depreciation and amortisation) surged 72.3 percent to Rs 164 crore with a strong margin expansion of 500 bps 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.
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.
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