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Sai Silks Kalamandir Limited has filed its draft prospectus for an initial public offering (IPO) with market regulator Sebi. The IPO will comprise a fresh issue of ₹600 crore and offer for sale to the tune of 18,048,440 equity shares. The face value of the equity shares is ₹2 each. From the total issue size, 50% of the offered equity shares will be kept reserved for qualified institutional buyers (QIBs), 15% of the size is allotted to non-institutional investors (NII), and the remaining 35% of shares are offered to retail individual investors (RII). The price band and launch date of the IPO will be announced after regulatory approval.
Under the offer for sale, selling shareholders of the company are - Nagakanaka Durga Prasad Chalavadi who will offload 6,410,005 equity shares, Jhansi Rani Chalavadi to sell 7,949,520 equity shares, Dhanalakshmi Perumalla to sell 3,083,865 equity shares, Doodeswara Kanaka Durgarao Chalavadi to sell 96,750 equity shares, Kalyan Srinivas Annam to sell 261,300 equity shares, Subash Chandra Mohan Annam to sell 138,000 equity shares, and Venkata Rajesh Annam to offload 109,000 equity shares.
Of the total fresh issue worth ₹600 crore, the company plans to utilise ₹122.58 crore for funding capital expenditure towards setting up 25 new stores, while ₹25.39 crore will be used for funding CAPEX towards setting up of two warehouses. It plans to utilise ₹235.99 crore for working capital expenditure of the company, whereas, ₹60 crore will be used for repayment or pre-payment of certain borrowings, and other general corporate purposes.
Companies like Motilal Oswal Investment Advisors, Edelweiss Financial Services, and HDFC Bank are acting as the book-running lead managers.
Sia Silks is one of the largest retailers of ethnic apparel, particularly sarees, in south India in terms of revenues and profit after tax in Fiscal 2019, 2020, and 2021. Through its four store formats, i.e., Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall, the company offers products to various segments of the market that include premium ethnic fashion, ethnic fashion for middle income, and value-fashion, with a variety of products across different price points, thereby catering to customers across all market segments.
The company leverages its store network of 46 stores as of May 31, 2022, to focus on spreading India’s vibrant culture, traditions and heritage by offering a diverse range of products which includes various types of ultra-premium and premium sarees suitable for weddings, and party wear, as well as occasional and daily wear; lehengas, men’s ethnic wear, children’s ethnic wear, and value fashion products comprising fusion wear and western wear for women, men and children.
The company's revenue from the sale of products declined by 42.39% from ₹11,754.60 million in Fiscal 2020 to ₹6,771.47 million in Fiscal 2021, on account of COVID-19. However, it witnessed a recovery in revenue FY21 level to ₹11,293.23 million in Fiscal 2022. Similarly, the company's profit after tax decreased by 87.81% from ₹420.96 million in Fiscal 2020 to ₹51.31 million in Fiscal 2021 due to the pandemic, however, recovery has been witnessed in its operations and that led to profit after tax at ₹576.87 million in Fiscal 2022.
Further, the company witnessed a 212.36% growth in sales from online channels between Fiscal 2021 and Fiscal 2022 from ₹54.92 million to ₹171.55 million. Also, its working capital borrowings increased by 36.89% from ₹1,393.76 million in Fiscal 2021 to 1,907.91 million in Fiscal 2022.
