Stanley Lifestyles IPO Review

Bengaluru-based, Stanley Lifestyles Ltd claims to be country’s largest super-premium and luxury furniture brand. Stanley Lifestyles IPO looks to raise Rs 537.02 crores. The issue is a combination of fresh issue of 0.54 crore shares aggregating to Rs 200.00 crores and offer for sale of 0.91 crore shares aggregating to Rs 337.02 crores.

IPO opensJune 21, 2024
IPO ClosesJune 25 2024
IPO Size (Rs.) ₹537.02 crores
IPO Size (shares)14,553,508 shares
BreakupFresh issue ₹337.02 Cr+ OFS  ₹200.00 Cr
Face Value:₹ 2
IPO Price in Rs :
₹351 to ₹369 per share
Minimum Lot40 Shares
Listing AtNSE BSE
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerAxis Capital, ICICI Securities, JM
Financial, SBI Capital Markets
RegistrarKFin Technologies Ltdta

About Stanley Lifestyles Limited:

  • Bengaluru-based, Stanley Lifestyles Ltd, the country’s largest super-premium and luxury furniture brand.
  • The company opened its first retail store in Bengaluru in 2011.
  • They retail their furniture products primarily through the 3 store formats: ‘Stanley Level Next’ targets customers in the ultra-luxury home solution price points. ‘Stanley Boutique’ targets customers in the luxury category price points and Sofas & ‘More by Stanley’ targets customers in the super premium price points.
  • As of December 31, 2023, they operated 38 “company owned and company operated” (“COCO”) stores all located in the major metro-cities of Bengaluru, Chennai, New Delhi, Mumbai and Hyderabad, all operated by their Subsidiaries and 24 “franchisee-owned and franchisee-operated” (“FOFO”) stores in 21 cities across 11 States and Union Territories in India.
  • The company operates two manufacturing facilities located in Electronic City and Bommasandra Jigani Link Road, Bengaluru, Karnataka.
  • Sunil Suresh and Shubha Sunil are the promoters of the company.

Financials: Stanley Lifestyles Limited

Particulars/ Rs (in crore)2023(09)2023(12)2022(12)2021(12)
Revenue from Operations313.31419292.2195.78
Revenue Growth (%) as stated43.39%49.25%
EBITDA57.7782.7259.0129.76
EBITDA Margin (%)18.44%19.74%20.19%15.21%
Net Profit18.734.9823.221.92
Net Profit (%)5.97%8.35%7.95%0.98%
Share Capital10.327.377.377.37
Reserves226.89209.13192.38175.56
Net Worth237.21216.5199.76182.93
RONW (%)5.58%15.18%10.69%0.56%
NAV (₹)44.5941.9638.7135.45
ROE (%)7.92%16.29%11.81%1.03%
Post issue Share Capital11.4   
FV2.0   
IPO price369.0   
EPS Fy236.1   
PE Fy233.0   
EPS Fy24 (annualized)60.1   
PE Fy24  (annualized)84.4   
Market cap in Lacs2,104   
Market cap / Sales5.02   

Anchors: Stanley Lifestyles IPO

Stanley Lifestyles has raised ₹161.10 crore from anchor investors ahead of its initial public offering. The anchor investors include names like SBI Mutual Fund, SBI AF, Nippon MF, HDFC MF, East Spring Investment India, Quant MF, SBI Life Insurance, Loomis and Sayles, Optimix Wholesale Global Emerging Markets Emerging Markets Share Trust, Franklin India Opportunities Fund, Bandhan MF, Motilal Oswal MF, Max Life, Aditya Birla SunLife Insurance, Meru Investment fund.

Stanley Lifestyles IPO: Salient Points

  •  There is a Strong growth of organized furniture and home goods market in India that is expected to witness high annual growth rates.
  • Promoters initially started by offering car seat leather upholstery services to global automotive brands and subsequently transitioned to the luxury furniture retail sector. Further they hey now offer a wide range of products, including sofas, armchairs, kitchen cabinets, beds, mattresses, and pillows, among others.
  • In 2018, the Oman India Joint Investment Fund took a 26% stake the the company. Subsequently, in 2019, the company secured an additional Rs 100 crore in funding from the Oman India Joint Investment Fund II. 
  • Use of net proceeds: Company plans to open 24 new company-owned company-operated stores, mainly in Mumbai, Delhi, Hyderabad.
  • They derive a substantial portion of sales from stores located in southern part of India  60% revenue comes from Karnataka, 11% from Telangana and Maharashtra each and about 5% from Delhi.
  • Apart from providing home solutions through its retail network, leveraging their ‘Stalnley’ brand, the company also supplies leather automotive interiors to auto OEMs. It also does B2B sales of premium and high-end luxury furniture products to airports, corporate offices and high-end hospitals etc., apart from doing contract manufacturing. About 1/4th revenue comes from these non furniture business like non-furniture B2C retailing, contract manufacturing, B2B sales for airports/hospitals, automotive seating covers.
  • They have developed brand recognition and customer loyalty through their quality products, as well as targeted marketing strategies and advertisement campaigns such as “Beautiful Living”, “Design Glamour”, “Luxury Unlimited” and “Bed of Dreams”.
  • Peers: None.
  • Their in-house manufacturing expertise coupled with its retailing model differentiates them from Indian and offerings by Foreign Peers.
  • Stanley Lifestyles Ltd is a super-premium luxury furniture brand in India, distinguished as one of the few domestic luxury consumer brands operating at scale in both manufacturing and retail.
  • In 2023, it ranked as the fourth largest player in the Indian home furniture market by revenue.
  • Company has shifted from a sales-driven model to design-led operations, evolving into a comprehensive provider of home solutions. They have added a wide range of related products, including sofas, armchairs, kitchen cabinets, beds, mattresses, and pillows, among others.
  • There are some grey areas as well
    • Company has bought ‘Stanley’ trademark and copyright from promoters for Rs. 37 cr.
    • 9mFY23 results are tad lower despite increase in store count.
  • Stanley Lifestyles IPO is coming at a PE ratio of 60x (FY23 Earnings) and 84x (fy24 earnings annualized).
  • I intend to apply in Stanley Lifestyles IPO subject to availability of funds. Valuations being demanded are quite high. Company’s prospects are closely aligned with the demands of the real estate market, which is experiencing good traction in key markets and thus it appears poised for growth.
  • GMP as reported on social media has been Rs. 170 (46%).
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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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