Sai Silks Kalamandir's IPO was subscribed 33 per cent a day ahead of its close. Including the Rs 360 crore bids received from anchor investors, the saree retailer has so far garnered bids worth Rs 640 crore as against shares worth Rs 1,200 crore on offer.
Sai Silks is looking to raise Rs 600 crore in fresh capital, which will be used to set up 30 new stores and two warehouses to help fuel its growth. As of July 2023, the company operated 54 stores across four formats: Kalamandir, VaraMahalakshmi Silks, Mandir and KLM Fashion Mall.
For the year ended 2022-23 (FY23), Sai Silks had reported a net profit of Rs 97.6 crore on revenues of Rs 1,351 crore. At the top-end of the price band, the company is valued at Rs 3,405 crore (post dilution)—about 35 times its FY23 earnings. Analysts believe given the company's high growth prospects and peer-group valuations, long-term investors can subscribe to the IPO. Peers such as Vedant Fashions and TCNS Clothing are currently trading at a P/E multiple of 74x and 88x, respectively, pointed out an analyst.
"We assign a 'subscribe for long term' rating to the IPO given the fair valuation of the stock, further expansion in high-margin store formats, and positive outlook on rising demand for sarees in South India, coupled with an expectation of a rise in discretionary spending and a rise in per capita income. IPO proceeds would also be deployed towards reducing payable days, thereby leading to improved gross margins," said a note by Indsec.
"The company has significant scope for growth, considering its diverse product profile and extensive client base, and expanding into the high growth and largest saree market, Chennai and the rest of Tamil Nadu, besides scope for improvement in operating margins, resulting in healthy earnings and returns ratios," said a note by Deven Choksey Research.
SignatureGlobal subscribed 1.6 times
The IPO of realty developer SignatureGlobal (SGL) India was subscribed 1.6 times on Thursday. The company's IPO consists of Rs 603 crore worth of fresh fund raise and Rs 127 crore of secondary share sale. At the upper-end of the price band of Rs 385, the company is valued at Rs 5,409 crore. As of March 31, 2023, SGL had sold 27,965 residential and commercial units, all within the Delhi NCR region. SGL's IPO also closes on Friday.