Sai Silks (Kalamandir) IPO Review

Sai Silks (Kalamandir) IPO entails to raise Rs 1,201.00 crores. The issue is a combination of fresh issue of 2.7 crore shares aggregating to Rs 600.00 crores and offer for sale of 2.71 crore shares aggregating to Rs 601.00 crores. Sai Silks (Kalamandir) is one of the largest apparel retailers in South India offering retail textile products such as sarees, women‘s wear, men‘s wear and kids wear.

IPO opensSep 20, 2023
IPO ClosesSep 22, 2023
IPO Size (Rs.)₹1,201.00 Cr
IPO Size (shares)54,099,027 shares
Breakup Fresh issue ₹600.00 Cr + OFS ₹601.00 Cr
Face Value:₹ 2
IPO Price in Rs :₹210 to ₹222 per share
Minimum Lot67 Shares
Anchor & QIB Quota50%
NII Quota15%
Retail Quota35%
 Lead ManagerMotilal Oswal , HDFC Bank and Nuvama Wealth Management

About Sai Silks (Kalamandir):

  • Sai Silks (Kalamandir) 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. (Source: Technopak Report)
  • Through its four store formats, i.e., Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall, it offers products to various segments of the market that include premium ethnic fashion, ethnic fashion for middle income and value-fashion.
  • As of May 31, 2022, it operated 46 stores in four major south Indian states, i.e., Andhra Pradesh, Telangana, Karnataka and Tamil Nadu.

Financials: Sai Silks (Kalamandir) IPO

Particulars / Rs cr.FYE23FYE22FYE21
Revenue from Operations1,351.471,129.32677.25
Revenue Growth (%)19.67%66.75%
EBITDA Margin (%)15.73%11.78%9.21%
Profit before Tax133.5777.297.31
Profit for the period97.5957.695.13
Net Profit Margin (%)7.22%5.11%0.76%
Equity Share Capital24.0724.0724.07
Net worth397.33300.66242.99
RoNW (%)24.56%19.19%2.11%
Net Asset Value33.0224.9920.19
Post issue Share Capital30.68  
IPO price222.0  
EPS Fy236.4  
PE Fy2334.9  
Market cap in Lacs3,405.5  
Market Cap/sales2.5  

Anchor: Sai Silks (Kalamandir) IPO

Sai Silks (Kalamandir) IPO: Salient Points

  • Sarees account for 2/3rd revenue.
  • southern states of Telangana, Andhra, Karnataka, Tamil Nadu, with Telangana and Andhra contribute r 75% of its revenue.
  • The company started operations through its first ‘Kalamandir‘ store in 2005 at Hyderabad and has over the years expanded to 54 stores in four the south Indian states
  • Sai Silks plans to use issue proceeds to add 30 new stores over the next 2 years,
  • 25 out of these stores are Vara Mahalaxmi format (high end) , and are in Tamil Nadu which has good market for silk saree. consuming geography.
  • The company procures directly from the suppliers from over 100 cities across India.and has a strong network of weavers to aggregators, which aids a seamless supply of goods.
  • In its key markets of Telangana, Andhra Pradesh and Karnataka, the company faces intense competition from RS Brothers group, Chandana group, JC Brothers group, Kalanikethan Silks and Nalli,
  • Company top-line has registered CAGR of ~41% over FY21-23, and the bottom line has also grown significantly along with higher margins.
  • Sai Silks (Kalamandir) IPO is coming at a PE ratio of 34.9x (fy23 earnings).
  • Listed Peers ,Vedant Fashion is trading at P/E of 76.2 times, Go Fashion (India) is trading at P/Eof 86.8 times.
  • I may apply in Sai Silks (Kalamandir) IPO subject to good response to the IPO on Day 3..
  • GMP as reported on social media is Rs. 7.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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