Sai Silks Kalamandir price band set at Rs 210-222 per share for Rs 1,201-crore IPO

Kalamandir's 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

Ethnic apparel retailer Sai Silks Kalamandir has set a price band of Rs 210-222 per share for its initial public offering, opening on on September 20. 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. At the upper end of the price band, the total issue size comes in at Rs 1,200 crore.

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The Telangana-based saree retailer has reserved 35 percent of the offer for retail investors, as per SEBI regulations. 50 percent has been reserved for qualified institutional buyers and 15 percent for non-institutional investors. The offer opens for subscription between September 20-22.

One lot size is 67 shares, amounting to Rs 14,874 at the upper end of the price band. The book running lead managers (BRLM) for the issue are Motilal Oswal, HDFC Bank, and Nuvama Wealth Management.

More details on the offer

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.

Meanwhile, fresh issue proceeds will be used 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.

With 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 and children’s ethnic wear.

In FY23, the company posted net profit of Rs 97.6 crore, up 69.2 percent on-year, backed by strong operating performance. Revenue from operations increased by 19.7 percent YoY to Rs 1,351.5 crore.

On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) in FY23 surged 60 percent YoY to Rs 212.5 crore with margin expansion of 394 bps at 15.72 percent compared to previous year.

One bps (basis point) is one-hundredth of a percentage point.