Stanley Lifestyles IPO subscribed 60 times on Day 3 so far; QIB Portion booked over 118x

The initial public offering (IPO) of Stanley Lifestyles continued to see a strong response from the investors during the third and final day of the bidding process. The bidding was joined by institutional bidders, while the first two days were led by HNI and retail investors of the issue.

The Bengaluru-based Stanley Lifestyles is selling its shares in the price band of Rs 351-369 apiece. Investors can apply for a minimum of 40 and its multiples thereafter. It is looking to raise Rs 537.02 crore via IPO, which includes a fresh share sale of Rs 200 crore and an offer-for-sale (OFS) of 91,33,454 equity shares.

According to the data, the investors made bids for 60,80,29,400 equity shares, or 59.37 times, compared to the 1,02,41,507 equity shares offered for the subscription by 2.50 pm on Tuesday, June 25. The three-day bidding for the issue, which opened on Friday, June 21, concludes today.

The allocation for non-institutional investors was subscribed 118.28 times, while the portion reserved for qualified institutional bidders (QIBs) saw a subscription of 90.81 times. However, the quota set aside for retail investors was booked 13.83 times as of the time.

Founded in 2007, Stanley Lifestyles designs and manufactures super-premium, luxury and ultra-luxury furniture and sells it through its brand 'Stanley'. Its product range includes categories like seating; wooden cased products; kitchen and cabinet; beds and mattresses; and automotive products.

The grey market premium of Stanley Lifestyles has remained firm on a back of strong interest from the investors during the bidding so far. Last heard, the company was commanding a premium of Rs 165-170 in the unofficial market, suggesting a listing pop of about 45-46 per cent for the investors.

Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it on the back of a niche business model, high margins, growth potential, clear focus of the management and attractive valuations. However, they see concentration in Southern India, limited product range and fluctuations in the raw material prices as the key risks for the company.

Stanley has delivered revenue growth at 46 per cent CAGR and Ebitda growth at 67 per cent CAGR between FY21-23. It expects organic growth of 25-30 per cent over the medium term. While based on its 9MFY24 annualized performance, we expect flat revenue growth for FY24E, said a note from Nirmal Bang Securities.

"There are no listed peers in the furniture industry in order to benchmark and evaluate a company's fair valuation. We considered Vedant Fashions and Sheela Foam as its peers based on their premium business model. Stanley’s issue is valued at 30 times of 9MFY24 annualised EV/Ebitda which is at discount when compared with average peer valuation," it added with a 'subscribe' tag.

Stanley Lifestyles mobilised Rs 161.1 crore from 16 anchor investors with allocation of 43,66,051 shares at Rs 369 apiece. The company reported an net profit of Rs 18.70 crore with a revenue of Rs 322.29 crore for the nine months ended on December 31, 2023. Its bottomline stood at Rs 34.98 crore with a revenue of Rs 425.62 crore for the financial year 2022-23.

Stanley Lifestyles is positioned for continued expansion and dominance in the sector. The industry dynamics seem positive with increasing demand for premium and luxury furniture, said the IPO note by Arihant Capital Markets.

"The renovation and expansion of 'Stanley Level Next', 'Stanley Boutique' and 'Sofas & More by Stanley' would bring additional business going forward. At the upper band, the issue is valued at PE of 84.4 times based on FY24 TTM EPS of Rs 4.4. We are recommending 'subscribe for listing gains' rating for this issue," it added.

Stanley Lifestyles has reserved 50 per cent of the issue for the qualified institutional bidders (QIBs), while non-institutional investors have 15 per cent of the net offer.  Remaining 35 per cent of the net offer shall be allocated towards retail investors.

ICICI Securities, Axis Capital, JM Financial and SBI Capital Markets are the book running lead managers of the Stanley IPO, while Kfin Technologies is the registrar for the issue. Shares of the company will be listed on both BSE and NSE, with Friday, June 28 as the tentative date of listing.


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