Hyderabad-based ethnic retailer Sai Silks Kalamandir IPO subscribed 4.4x

• The issue received good interest from QIBs even as its retail portion was not fully subscribed.
• It consists of a fresh issue of ₹600 crore and OFS of up to 2.7 crore equity shares.
• The net proceeds will be used for capex, working capital needs, debt payment and more.
  

Sai Silks Kalamandir’s ₹1,201 crore public issue was subscribed 4.4 times the shares on offer on the last day, on Friday.

The issue received good interest from qualified institutional buyers (QIBs) even as its retail portion was not fully subscribed.

The issue had fixed a price band of ₹210-222 per share for its initial share sale.



Source: BSE

The issue consists of a fresh issue of equity shares worth up to ₹600 crore and an Offer for Sale (OFS) component of up to 2.7 crore equity shares by promoters and promoter entities.

It intends to use the net proceeds towards capex to establish 30 additional stores and two warehouses, along with working capital needs, debt payment and general corporate purposes.

The company is promoted by Nagakanaka Durga Prasad Chalavadi and Jhansi Rani Chalavadi. They along with other promoter group entities sold shares as a part of the public issue.

The company has a network of 54 stores in four major south Indian states -- Andhra Pradesh, Telangana, Karnataka and Tamil Nadu. It has four store formats -- Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall.

Its listed peers include Vedant Fashions, Go Fashion (India), Aditya Birla Fashion and Retail, Trent and Shoppers Stop.

For the financial year ended March 2023, SSKL reported a total revenue of ₹1,351 crore with a net profit of ₹97.6 crore.

“Sai Silk (Kalamandir) is a leading apparel retail brand in India with a scalable model, which is well positioned to leverage growth in the ethnic and value-fashion apparel industry in India with a track record of growth, profitability, and unit economics with an efficient operating model,” said a research report by Anand Rathi.

At the upper price band company is valuing at P/E of 33x with a market cap of ₹3,404 crore post issue of equity shares and return on net worth of 24.56%, said the research firm, which gave it a subscribe for long-term rating to the IPO.