Mumbai: The initial public offer (IPO) by apparel retailer Sai Silks (Kalamandir) Ltd will mark a first for the Indian market —the promoters will provide a safety net for original, resident, individual retail allottees.
The safety net mechanism is still under discussion and has not been made mandatory by the Securities and Exchange Board of India (Sebi).
The company aims to raise as much as Rs.89 crore with shares on offer in the price band of Rs.70-75 apiece between 11 February and 13 February.
Under the safety net scheme, if the market value of the stock falls below the issue price at any time during the scheme period, the providers will buy back shares at the sale price from original allottees. The buyback will be subject to a maximum of 1,000 equity shares per allottee. The safety net scheme is valid for six months from the date on which the shares are credited to the demat account of the allottee.
Of the money raised, Rs.59.99 crore will be utilized for long-term working capital requirements, Rs.12.73 crore for setting up retail outlets, Rs.8.50 crore for brand promotion and Rs.0.91 crore for early payment of term loans, Sai Silks said in a statement.
Sai Silks (Kalamandir) sells sarees, textiles for women’s clothing, menswear and childrenswear besides gold and silver jewellery. The company has 15 shops in south India.