Entirely OFS issue. Prompters strake will drop from 69% to drop to 55%.
56% of OFS by financial investors, who are making complete exit after > 15 year period.
Price band: ₹266 to ₹280
Lot size of 53 Shares
Credo Brands Marketing offers casual clothing for men with its flagship brand, Mufti.
Company was founded by Kamal Khushlani.
Based on market share in fiscal 2022.Credo Brands is one of the largest homegrown brands in the country’s mid-premium and premium men’s casual wear market.
Company’s brand Mufti Mesnwear, completed s 25 years this year.
It has operations in 582 cities as of March 31, 2023.
It provides a wide array of wardrobe solutions, with a range of products that includes shirts, t-shirts, jeans, chinos, and more.
Company’s product mix has evolved significantly over the past several years from consisting of only shirts, t-shirts, and trousers in the year 1998 to a wide range of products including sweatshirts, jeans, cargos, chinos, jackets, blazers and sweaters in relaxed holiday casuals, authentic daily casuals to urban casuals, party wear and athleisure categories.
Company’s products are available through a pan-India multichannel distribution network that they have built over the years comprising of their exclusive brand outlets (“EBOs”), large format stores (“LFSs”) and multi-brand outlets (“MBOs”), as well as onlinechannels comprising of their website and other e-commerce marketplaces.
Out of total 404 EBOs as of September 30, 2023, approximately 66.34% of their EBOs are on the high streets, approximately 32.18% are in malls, approximately 1.49% of their EBOs are in airports.
The brand was created as an alternative dressing solution and was designed to deliver a casual alternative.
Their design team has 17 members which enabled the company to create and produce more than 682 designs.
For FY23, the company generated a revenue of ₹498 crore, an increase of 46% compared to a revenue of ₹341 crore posted in FY22.
Its profit after tax for FY23 was ₹77.51 crore, an improvement of 116.87% over FY22.
Financials
Particulars / Rs. Cr
2023 (03)
2023 (12)
2022 (13)
2021 (13)
Revenue from Operations
118.49
498.18
341.17
244.83
Revenue Growth (%)
–
46.02%
39.35%
–
EBITDA
30.25
163.85
95.10
48.48
EBITDA Margin (%)
25.53%
32.89%
27.87%
19.80%
Profit before Tax
11.31
103.81
47.83
4.01
Net Profit
8.58
77.51
35.74
3.44
Net Profit Margin (%)
7.24%
15.56%
10.48%
1.41%
Equity Share Capital
12.86
3.22
3.19
3.19
Reserves
277.02
278.14
232.53
189.14
Net worth
289.88
281.35
235.73
192.33
EPS – Basic (₹)
1.33
12.06
5.60
0.54
EPS – Diluted (₹)
1.33
12.06
5.56
0.54
RoNW (%)
3.00%
29.98%
16.70%
1.81%
Net Asset Value (₹)
45.08
43.75
36.92
30.13
Post issue Share Capital
12.86
FV
2.0
IPO price
280.0
EPS Fy23
12.1
PE Fy23
23.2
EPS Fy24 (annualized)
5.3
PE Fy24 (annualized)
52.5
Market cap in Lacs
1,800.4
Market cap / Sales
3.61
Days before the IPO, Bennett Coleman, offloaded more than a 4% equity stake in Credo Brands Marketing, for over ₹81 crore,
Bennett Coleman sold 25.36 lakh equity shares to ACM Global Fund VCC and 3.6 lakh equity shares to Negen Capital Services
Anchor Book:
It plans to open at least 50 new stores every year.
A matter of concern is that their Q1FY24, sales suffered, with revenue down to Rs.119 cr, due to poor revenue from MBOs which was e Rs. 21 cr against Rs. 151 cr in FY23. Company has not published Q1FY23 (comparable quarter nos.) nor Q2FY24 financials,
Company gets manufacturing done from third-parties,
Credo Brands IPO is coming at a PE of 23.6x (FY23) and 52.56x (annualized FY24 earnings). It Mcap/sales is 3.61
PE ratio and market/sales for peer Go Fashion (India) are 81.4, 9.75
PE ratio and market/sales for peer Arvind Fashion are 147, 1.18
PE ratio and market/sales for peer Kewal Kiran Clothing are 33.3, 5.64.
I have a neutral view on Credo Brands IPO.
I have not made up my mind to apply for Credo Brands IPO. May apply at last minute. This is partly due to weakness in market and too many IPOs in coming days. .
