- Date : 07/02/2022
- Read: 4 mins
The price band for the issue is between Rs 824 and Rs 866 per share.
Manyavar is considered one of India’s largest ethnic and celebration wear brands, especially in the men’s fashion space. It is difficult to miss the brand’s large multistorey outlets in prime localities of most cities or watch the biggest movie and cricketing celebrities endorsing Manyavar’s celebration-wear on the television, in movie theatres and across digital platforms.
From humble beginnings to Rs 1000 crore revenue
Helmed by Ravi Modi, the business was incorporated as Vedanta Fashions Private Limited (VFPL) in 2002. What started off as a modest garment store in Kolkata’s AC market has turned into a behemoth ethnic brand that is racing towards Rs 1000 crore in revenues annually, with a presence in over 546 locations in India, the US, Canada, UAE, Bangladesh and Nepal.
The company still operates out of its home base in Kolkata, where it has an established operational setup. Additionally, it also maintains a robust network of affordable craftsmen for the delicately embroidered apparel, which help keep costs in check.
One of the biggest USPs of the brand is its strong reliance on data analytics for inventory management that allows for automatic stock replenishment and inter-store stock transfer basis demand, because of which it is able to minimise idle inventory and maintain price parity all year long.
Also Read: All About IPOs In India
What you should know about the Manyavar IPO
The parent company VFPL is accepting public subscriptions for the Manyavar IPO to the tune of Rs 3,149 crore (for 3,63,64,838 equity shares) between February 4 and February 8, 2022. The price band for the Vedanta Fashions IPO issue is between Rs 824 and Rs 866 per share.
- IPO size: Rs 3,149 crore
- Price band: Rs 824 to Rs 866 per share
- Bid lot size: 17 shares
- Application amount (per lot): Rs 14,722
- Maximum bid size for retail quota: 14 lots
- Maximum bid amount for retail quota: Rs 2.06 lakh
- Price-to-Earning (PE): 44.7x on FY24 earnings
The company has already raised Rs 944.75 crore (via allotment of 1,09,09,450 equity shares) ahead of the IPO from 75 anchor investors. Some of the institutional investors and Asset Management Companies include State Bank of India, Kotak Bank, Axis Mutual Fund, Edelweiss Capital, HDFC Life Insurance, Morgan Stanley, Fidelity Securities, Nomura, Government of Singapore and Abu Dhabi Investment Authority, amongst others.
Also Read: A Woman's Guide To Investing In IPOs
How will the Manyavar IPO funds be used?
VFP plans to scale up its emerging brands, including the foray into women’s ethnic wear ‘Mohey’ via increased up-selling and cross-selling initiatives. It will also be looking to expand its domestic presence by further penetrating existing markets and expanding its international presence.
Should you invest in the Vedanta Fashions IPO?
Manyavar is the category leader in celebration wear and has the largest number of Exclusive Brand Outlets (EBOs) compared to its peer brands. It also maintains an impressive operating margin of 43% and a Return on Capital (ROCE) of 41%.
On the other end, investors need to be mindful that the brand is exclusively focused on ethnic and celebration wear. Change in consumer taste and demand, pandemic led uncertainties, and the economic slowdown will have a direct impact on potential growth plans. The business also needs to brace for growing competition in the men’s wear market from established brands such as Aditya Birla Fashion and Reliance.
Also Read: IPO Exit Strategies To Optimise Your Gains
The issue is priced aggressively, and at the current price band, there may not be a lot of margin of safety for investors. Most brokerage houses and investment agencies have rated the Manyavar IPO with a ‘subscribe with caution’ and ‘buy for long-term only’ advisory.
Manyavar is considered one of India’s largest ethnic and celebration wear brands, especially in the men’s fashion space. It is difficult to miss the brand’s large multistorey outlets in prime localities of most cities or watch the biggest movie and cricketing celebrities endorsing Manyavar’s celebration-wear on the television, in movie theatres and across digital platforms.
From humble beginnings to Rs 1000 crore revenue
Helmed by Ravi Modi, the business was incorporated as Vedanta Fashions Private Limited (VFPL) in 2002. What started off as a modest garment store in Kolkata’s AC market has turned into a behemoth ethnic brand that is racing towards Rs 1000 crore in revenues annually, with a presence in over 546 locations in India, the US, Canada, UAE, Bangladesh and Nepal.
The company still operates out of its home base in Kolkata, where it has an established operational setup. Additionally, it also maintains a robust network of affordable craftsmen for the delicately embroidered apparel, which help keep costs in check.
One of the biggest USPs of the brand is its strong reliance on data analytics for inventory management that allows for automatic stock replenishment and inter-store stock transfer basis demand, because of which it is able to minimise idle inventory and maintain price parity all year long.
Also Read: All About IPOs In India
What you should know about the Manyavar IPO
The parent company VFPL is accepting public subscriptions for the Manyavar IPO to the tune of Rs 3,149 crore (for 3,63,64,838 equity shares) between February 4 and February 8, 2022. The price band for the Vedanta Fashions IPO issue is between Rs 824 and Rs 866 per share.
- IPO size: Rs 3,149 crore
- Price band: Rs 824 to Rs 866 per share
- Bid lot size: 17 shares
- Application amount (per lot): Rs 14,722
- Maximum bid size for retail quota: 14 lots
- Maximum bid amount for retail quota: Rs 2.06 lakh
- Price-to-Earning (PE): 44.7x on FY24 earnings
The company has already raised Rs 944.75 crore (via allotment of 1,09,09,450 equity shares) ahead of the IPO from 75 anchor investors. Some of the institutional investors and Asset Management Companies include State Bank of India, Kotak Bank, Axis Mutual Fund, Edelweiss Capital, HDFC Life Insurance, Morgan Stanley, Fidelity Securities, Nomura, Government of Singapore and Abu Dhabi Investment Authority, amongst others.
Also Read: A Woman's Guide To Investing In IPOs
How will the Manyavar IPO funds be used?
VFP plans to scale up its emerging brands, including the foray into women’s ethnic wear ‘Mohey’ via increased up-selling and cross-selling initiatives. It will also be looking to expand its domestic presence by further penetrating existing markets and expanding its international presence.
Should you invest in the Vedanta Fashions IPO?
Manyavar is the category leader in celebration wear and has the largest number of Exclusive Brand Outlets (EBOs) compared to its peer brands. It also maintains an impressive operating margin of 43% and a Return on Capital (ROCE) of 41%.
On the other end, investors need to be mindful that the brand is exclusively focused on ethnic and celebration wear. Change in consumer taste and demand, pandemic led uncertainties, and the economic slowdown will have a direct impact on potential growth plans. The business also needs to brace for growing competition in the men’s wear market from established brands such as Aditya Birla Fashion and Reliance.
Also Read: IPO Exit Strategies To Optimise Your Gains
The issue is priced aggressively, and at the current price band, there may not be a lot of margin of safety for investors. Most brokerage houses and investment agencies have rated the Manyavar IPO with a ‘subscribe with caution’ and ‘buy for long-term only’ advisory.
