All you need to know about Stanley Lifestyles Limited's IPO

The issue for Stanley Lifestyles Limited IPO, a super premium/ luxury furniture brand opens today, and will continue till 25th June. The IPO intends to raise Rs 537.02 crores, out of which Rs 200 crore will be raised via fresh issue, and the remaining Rs 337.02 crores will be raised via offer for sale (OFS). The share’s price band is set between Rs 351 and Rs 369.
What does Stanley Lifestyles do?
As the fourth largest player (in terms of revenue) in the home furniture segment in India, the company offers multiple home solution products like beds, armchairs, kitchen cabinets and sofas under the brand name Stanley. It has stores across the country, and is one of the few companies in this segment that caters to different price categories like luxury, ultra-luxury, super premium and more. While the company has 63 stores at present, it aims to increase this number to 100-110 in the next 3 years.

The IPO aims to raise funds for investment in certain subsidiaries for opening of new stores (Rs 90.127 crore), opening of anchor stores (Rs 39.9 crore) and renovation of existing stores (Rs 10.04 crore), funding the capex requirements, like buying new machinery and equipment (Rs 6.659 crores).
Pitfalls
The company does not own the brand Stanley, which is actually registered under one of the promoters. In case the company does not timely register the brand name, or the promoter decides to break away, it could impact the company’s business. Additionally, their business is heavily reliant on the sale of sofas and recliners. Most of their sales stem from south India, indicating a lack of brand awareness and penetration in the northern regions of the country.
What are the experts saying?
As per Master Capital Service Ltd, “The company is a furniture manufacturer that operates in ultra luxury, luxury and the super premium segment of the market. The management is betting on an uptick in residential demand where the homeowners will get possessions in the coming few years and will then look to buy new furniture. We advise subscribing to the IPO for listing gains”

According to stock analyst Dilip Dawda, the company bounced back with steady profits in FY22 and FY23, after facing a setback in FY21. However, based on the company’s FY24 earnings, the present issue seems aggressively priced. Only veteran investors who have surplus funds can subscribe to the IPO from a long term perspective.