Sai Silks Kalamandir Limited IPO
Sai Silks Kalamandir Limited IPO (SSKL) is opening for subscription from September 20, 2023 to September 22, 2023. Sai Silk DRHP filed on July 21, 2022 for an INR 1,201 crore of initial public offering. The offer consists of fresh issue of INR 600 crores and offer for sale of 27,072,000 shares with a face value of ₹2 aggregating up to ₹601.00 Cc.
Sai Silks Kalamandir is one of the most coveted ethnic fashion brands in South India. The company has nine stores spread across Telangana, Andhra Pradesh, & Karnataka and planning to expand across India. The brands of Kalamandir cater to customers across all market segments that include premium ethnic fashion, ethnic fashion for the middle income, and value fashion. Among the above brands, Sai Silks (Kalamandir) Limited’ has four types of store formats.
- VaraMahalakshmi Silks
- KLM Fashion Mall
Sai Silks Kalamandir Limited – Financial Analysis
Total revenue was severely impacted by the spread of COVID-19 followed by lock down in FY 2021. The total income has declined from INR 1179.6 Crores in FY 2020 to INR 679.1 Crores in FY 2021. However, the total income again reached the pre-covid level of INR 1133 Crores in FY 2022. Profit after tax has increased from INR 42.1 Crores in FY 2020 to INR 57.1 Crores in FY 2022 which is a growth of CAGR of 35% between the Fiscals 2020 and 2022.
Sai Silks Kalamandir Limited IPO pricing and issue size
Sai Silks Kalamandir Limited filed DRHP for INR 600 crores of fresh issue and offer for sale (OFS) up to 18,048,440 Equity Shares by the Promoter and selling shareholders at a face value of INR 2 each. Initial promoters such as Nagakanaka Durga Prasad Chalavadi and Jhansi Rani Chalavadi are selling a majority of their stake of up to 6,410,005 Equity Shares and up to 7,949,520 Equity Shares respectively.
Book Running Lead Managers and registrar of this IPO are
- Motilal Oswal Investment Advisors Limited
- Edelweiss Financial Services Limited
- HDFC Bank Limited
- The registrar for this IPO is Bigshare Services Private Limited.
- No more than 50% of the Offer is available for the QIB portion
- The company may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis
- 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only
- No less than 15% of the Offer will be allocated to NIBs
- Not less than 35% of the Net Offer shall be available for allocation to retail individual bidders (RIBs)
Utilization of Net Proceeds from Sai Silks Kalamandir IPO
The company will not receive any amount from the offer for sale. However, Sai Silks Kalamandir Limited is proposing below to utilize the net proceeds from the fresh issue of the IPO.
- Funding capital expenditure towards setting up 25 new stores. INR 122.59 Crores is allocated to this purpose.
- The company also proposes to set up two warehouses. The total expenditure proposed for this purpose is INR 25.4 Crores.
- Approximately INR 236 Crores is proposed to meet the working capital of the company.
- The company will also repay or pre-pay INR 60 crores to reduce its outstanding borrowings. The company had total outstanding borrowings of INR 260 crores as of June 15, 2022.
Risk Factors in Investing in Sai Silks Kalamandir IPO
- Sai Silks Kalamandir Limited is concentrated in South India only. Any natural or unnatural events in South India may affect the company.
- The business is highly concentrated on the sale of women’s sarees and is vulnerable to variations in demand and changes in consumer preference.
- The high Debt-to-Equity ratio and low EPS and low net cash flow from operation.
- Low entry barrier to this business. Any other company with a high pocket can open stores and give strong competition.
- Competitors are well established both online and offline. Competing with established players in states other than South India will be difficult.
- Finally, the demand for these products is vulnerable to any economic slowdown.
- Sai Silks Kalamandir Limited has significantly expanded it’s business and scale of operations with 25 stores opening.
- The company is also planning to expand its operation into other states.
- However, the company does not have strong financial performance in terms of ROE, ROCE, net profit, EPS, etc. over the years.
- There is huge competition and the business is mostly seasonal.
- I prefer to avoid Sai Silks Kalamandir Limited IPO.
- However, the valuation of Sai Silks Kalamandir Limited IPO remains to see before investing.
Sai Silks Kalamandir Limited IPO
|Sai Silks Kalamandir IPO Details||IPO details|
|Sai Silks Kalamandir Limited IPO Subscription Dates||September 20, 2023 to September 22, 2023|
|Sai Silks Kalamandir IPO Listing Date||Wednesday, October 4, 2023|
|Sai Silks Kalamandir IPO Price Band||₹210 to ₹222 per share|
|Sai Silks Kalamandir IPO Allotment Date||Wednesday, September 27, 2023|
|Initiation of Refund||Friday, September 29, 2023|
|Credit of Shares to Demat||Tuesday, October 3, 2023|
|Sai Silks Share Listing Date||Wednesday, October 4, 2023|
|Fresh Issue||₹600 Crores|
|Offer for sale||27,072,000 shares of ₹2|
(aggregating up to ₹601.00 Cr)
|Equity Shares outstanding before the Issue||126,339,085 Equity Shares|
|Minimum bid (lot size)|
|1 lot (67 shares)|
|Maximum bid (lot size)|
|13 lots (871 shares)|
|Face Value||₹2 Per Equity Share|
|Sai Silks Share Price Listed on||BSE & NSE|
Sai silks kalamandir IPO: Contact Details
|Contact Details||Lead Managers|
|6-3-790/8, Flat No. 1|
Bathina Apartments, Ameerpet
Hyderabad 500 016
Telephone: +91 40 6656 6555
|1. Motilal Oswal Investment Advisors|
2. Edelweiss Financial Services Limited
3. HDFC Bank Limited
We endeavor to help you to understand different aspects of a company before you invest in the company’s IPO. Here are some suggested readings on company insights BIBA Fashion Limited IPO, Kfin technologies IPO, Mankind Pharma IPO.
SSKL IPO GMP
|Date||SSKL IPO GMP||IPO Price|
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