Sai Silks Kalamandir IPO: 10 things to know before subscribing to Rs 1,201-crore issue

Investors can bid for a minimum of 67 equity shares and multiples of 67 after that.

Sai Silks Kalamandir’s Rs 1,201-crore IPO will open for subscription today on September 20. Ahead of the IPO, the company has raised Rs 360 crore from 26 anchor investors. The offer comprises fresh issuance of shares worth Rs 600 crore and an offer-for-sale (OFS) of 2.7 crore equity shares worth Rs 601 crore by the promoter group.

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

1) IPO Dates

The IPO will open for subscription today i.e. September 20, 2023, and will end on September 22, 2023.

2) Price Band

The price band for the issue has been fixed at Rs 210-222.

3) Offer Details

Sai Silks Kalamandir plans to raise Rs 1,201 crore via the IPO. The company has already raised Rs 360 crore from anchor investors, ahead of the IPO. Global marquee investors Societe Generale, Citigroup Global Markets Mauritius, HSBC, BNP Paribas Arbitrage, SBI Mutual Fund, ICICI Prudential Mutual Fund, Whiteoak Capital, Eastspring Investments India, HDFC Mutual Fund, Kotak Mahindra Trustee, Aditya Birla Sun Life Trustee, Abakkus Growth Fund, and Mirae Asset India invested in the company via anchor book.

4) Objectives of Issue

The company will use proceeds from the IPO to set up 30 new stores at a cost of Rs 125.08 crore, two warehouses with a spend of Rs 25.4 crore, and working capital requirements amounting to Rs 280.07 crore. Sai Silks will also repay its Rs 50-crore debt.

5) Lot Size

Investors can bid for a minimum of 67 equity shares and multiples of 67 after that. Hence, the minimum investment by retail investors would be Rs 14,070 (67 (Lot size) x 210 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,874.

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6) Company Profile

Nagakanaka Durga Prasad Chalavadi-founded Sai Silks Kalamandir has a network of 54 stores in Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu as of July 2023. The company offers a diverse range of products including ultra-premium and premium sarees, lehengas, and men's & children’s ethnic wear.

7) Financials

The company has reported a healthy financial performance in the past years with net profit rising 69.1 percent in the year ended March 2023 year-on-year to Rs 97.6 crore, backed by strong operating performance compared to Rs 57.7 crore in the year-ago period. Revenue from operations during the same period increased by 19.7 percent to Rs 1,351.5 crore in FY23. EBITDA (earnings before interest, tax, depreciation and amortisation) in FY23 jumped 60 percent to Rs 212.5 crore with a margin expansion of 394 bps at 15.72 percent, compared to the previous year.

8) Merchant Bankers

Motilal Oswal Investment Advisors, HDFC Bank, and Nuvama Wealth Management are the merchant bankers for the offer, while Bigshare Services is the registrar for the issue. Meanwhile, half of the public issue size has been reserved for qualified institutional buyers (QIB), 15 percent for high-net-worth individuals (non-institutional investors), and the remainder 35 percent for retail investors.

9) Selling Shareholders

Nagakanaka Durga Prasad Chalavadi, Jhansi Rani Chalavadi, Dhanalakshmi Perumalla, Doodeswara Kanaka Durgarao Chalavadi, Kalyan Srinivas Annam, Subash Chandra Mohan Annam, and Venkata Rajesh Annam are the selling shareholders.

10) Listing Date

Sai Silks Kalamandir's shares will be listed on both NSE and BSE. The stock is expected to list on Wednesday, October 4, 2023. However, no official announcement has been made till now.