Telangana-based ethnic apparel retailer Sai Silks Kalamandir has decided to launch its maiden public issue on September 20. This would be the ninth IPO getting launched in current month.
The initial public offering comprises a fresh issuance of shares worth Rs 600 crore by the company and an offer-for-sale (OFS) of 2,70,72,000 equity shares by promoter group. The OFS size has been increased from 1.8 crore announced in the draft red herring prospectus filed in July last year.
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.
The price band for the offer, which closes on September 22, will be announced by the company soon. The anchor book, a part of QIB, will be opened for subscription for a day on September 18, a day before the issue opening.
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Half of the public issue size has been reserved for qualified institutional buyers (QIB), 15 percent for high networth individuals (non-institutional investors), and the remainder 35 percent for retail investors. Of the QIB, up to 60 percent portion is set aside for anchor investors.
Sai Silks Kalamandir (SSKL) that claimed to be amongst the top 10 retailers of ethnic apparel, particularly sarees, in south India in terms of revenues and net profit in FY22 will make use of net fresh issue proceeds for setting-up of 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. The company will also repay its Rs 50 crore debts via issue proceeds.
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With a network of 54 stores in Andhra Pradesh, Telangana, Karnataka and Tamil Nadu as of July 2023, the Nagakanaka Durga Prasad Chalavadi-founded company offers a diverse range of products including ultra-premium and premium sarees, lehengas, and men & children’s ethnic wear.
SSKL has recorded healthy financial performance in the past years with net profit rising significantly by 69.2 percent on-year to Rs 97.6 crore, backed by strong operating performance. Revenue from operations during the same period increased by 19.7 percent to Rs 1,351.5 crore in the year ended FY23.
On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) in FY23 surged 60 percent to Rs 212.5 crore with margin expansion of 394 bps at 15.72 percent compared to previous year.
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Motilal Oswal Investment Advisors, HDFC Bank, and Nuvama Wealth Management are the merchant bankers for the offer, while Bigshare Services is the registrar to the issue.
Signature Global, Yatra Online, Zaggle Prepaid Ocean Services, SAMHI Hotels, R R Kabel, EMS, Jupiter Life Line Hospitals, and Ratnaveer Precision Engineering are other IPOs launched in September.
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