Mufti Menswear IPO: 10 things to know before subscribing to Rs 549-crore issue

The IPO will open for subscription on December 19

Mufti Menswear parent Credo Brands Marketing Limited's initial public offering (IPO) will open for subscription on December 19. The Rs 549.78-crore public issue is an offer for sale of 1.96 crore shares. The company will launch its anchor book for a day on December 18.

Here are 10 key things to know before subscribing to the offer:

1) IPO Dates

The IPO will open for subscription on December 19 and close on December 21.

2) Price Band

The price band for the issue has been fixed at Rs 266-280 a share.

3) Offer Details

The IPO is an offer for sale of 1.96 crore shares by existing shareholders, including promoters Kamal Khushlani and Poonam Khushlani. Further, non-promoters, including Concept Communication, Bela Properties, Jay Milan Mehta and Sagar Milan, will also offload shares in the OFS.

As there is no fresh issue component by the company, all the IPO funds, excluding offer expenses, will go to selling shareholders.

4) Objectives of the Issue

Given that the issue a purely offer for sale, its proceeds will go to the selling shareholders, with the company not getting any money through IPO.

5) Lot Size

Investors can bid for a minimum of 53 equity shares and in multiples of 53 after that. The minimum amount of investment required by retail investors is Rs 14,098 [ 53 x 266 (lower price band)). At the upper band, the bidding amount will increase to Rs 14,840.

6) Company Profile

Incorporated in 1999, Credo Brands Marketing Limited offers casual clothing for men with its flagship brand "Mufti".

In 1998, the company's product range consisted only of shirts, T-shirts and trousers. Today, however, the company offers a wide range of products including sweatshirts, jeans, cargos, chinos, jackets, blazers and sweaters.

The company currently operates 1,773 retail outlets across India (as of May 31, 2023). These include 379 exclusive brand stores, 89 large format stores and 1,305 multi-brand stores.

7) Financials

In the year ended March 2023, Mufti 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. However, For the April-June quarter of the current financial year, its net profit WAS  Rs 8.57 crore on revenue of Rs 118.5 crore.

8) Lead Managers

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.

9) Risks

i.) While the company designs its products in-house, it outsources the manufacturing of the final product. Any inability to obtain sufficient quantities of apparel of the requisite quality promptly and at acceptable prices, or a slowdown, shutdown, or disruption in such third-party manufacturing partners' operations and performance, could adversely affect its business, cash flows, results of operations, and financial condition.

ii.) In the highly competitive industry, Mufti faces pricing pressure from rivals, impacting its capacity to sustain or raise product prices. Consequently, this may have adverse effects on revenue from product sales, gross margin, and overall profitability, posing potential risks to its business, cash flows, results of operations, and financial condition.

iii.) One of the company's non-executive director is a director on the board of directors of Arvind Fashions Limited, a company engaged in the same line of business as Mufti.

10) Listing Date

Mufti Menswear IPO will list on BSE, and NSE with a tentative listing date fixed as Wednesday, December 27, 2023.