The initial public offering (IPO) by Campus Activewear is slated to hit the primary market on April 26 to raise Rs 1,400 crore. The company has fixed a price band of Rs 278-Rs 292 per share for the public issue that will close on April 28. Campus Activewear primarily manufactures, distributes and sells sports and athleisure footwear.
It has one of the widest portfolios of footwear products with 6,388 stock keeping units (SKUs). It has a strong presence in the men’s category with over 80 per cent sales contribution over FY19-21. Its sales from premium products have increased from around 31 per cent of sales in FY19 to 41 per cent in 9M FY22. The company's market share in branded sports and athleisure footwear increased to around 17 per cent in FY21 from 15 per cent in FY20. The footwear major will not receive any proceeds from the offer for sale.
Here is all you need to know before subscribing to the issue.
Lot size: Retail investors can bid for a minimum of one lot which comprises 51 shares (Rs 14,892 at the upper price band) and a maximum of 13 lots worth Rs 1,93,596.
Financials: The company reported a profit after tax of Rs 84.80 crore for nine months ended December 31, 2021 against Rs 16.80 crore in the corresponding period last year. It had posted a profit of Rs 26.90 crore, Rs 62.40 crore and Rs 38.60 crore in FY21, FY20 and FY19, respectively. On the other hand, revenue from operations jumped to Rs 841.80 crore in 9MFY22 against Rs 436.20 crore in 9MFY21.
Experienced management team: The company’s chairman has over 37 years of experience in the footwear industry in India. Further, their senior management team is a professional team with a combined experience of over 125 years in FMCG, retail, technology and consulting businesses.
Grey market premium (GMP): Shares of the company traded at a premium of Rs 60 in the unlisted market on April 25, according to ipowatch.in.
Should you subscribe: Brokerages gave a ‘Subscribe’ rating to the issue. Anand Rathi Share and Stock Brokers said, “We reckon operations in fast-growing segment, high and rising market share and strong financials are positives for the company.”
Marwadi Financial Services also gave a ‘Subscribe’ rating to the issue. “Considering the trailing twelve months (TTM) (December 21) earnings per share (EPS) of Rs 3.12 on a post-issue basis, the company is going to list at a P/E of 93.72 times with a market capitalisation of Rs 8,886.3 crore whereas its peers namely Relaxo Footwear and Bata India are trading at P/E of 103 times and 357 times,” the brokerage house said.
“We assign a “Subscribe” rating to this IPO as the company is the largest sports and athleisure footwear brand having 17 per cent market share in India by value. Also, it is available at a reasonable valuation as compared to its peers,” Marwadi Financial Services said.
Listing: Shares of the company are proposed to be listed on BSE and NSE. The tentative date for the Campus Activewear shares listing is May 9, 2022.
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