Sai Silks IPO: Market buzz, company details, upper end price range expectation and more
Sai Silks (Kalamandir) Ltd, an ethnic apparel retailer, is set to launch its initial public offering (IPO) with a price range of Rs 210-222 per share, aiming to raise Rs 1,201 crore. The company plans to utilize the IPO proceeds for expanding its store network, working capital, and more.
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FollowSai Silks (Kalamandir) Ltd, an ethnic apparel retailer, has set a price range of Rs 210-222 per share for its initial public offering (IPO) worth Rs 1,201 crore, commencing on September 20. At the upper end of this price range, the IPO is expected to raise approximately Rs 1,201 crore.
About Sai Silks (Kalamandir) Limited
This Hyderabad-based saree retailer's IPO will conclude on September 22 and is promoted by Nagakanaka Durga Prasad Chalavadi and Jhansi Rani Chalavadi. The Offer for Sale (OFS) includes shares sold by various individuals, including Nagakanaka Durga Prasad Chalavadi, Jhansi Rani Chalavadi, Dhanalakshmi Perumalla, Doodeswara Kanaka Durgarao Chalavadi, Kalyan Srinivas Annam, Subash Chandra Mohan Annam, and Venkata Rajesh Annam.
Sai Silks operates under four store formats: Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall. As of July 31, 2023, the company had established a network of 54 stores across four major south Indian states, including Karnataka, Tamil Nadu, Andhra Pradesh, and Telangana.
For the fiscal year ending in March 2023, SSKL reported a total revenue of Rs 1,351 crore and a net profit of Rs 97.6 crore.
Number of Shares Reserved
The Sai Silks Kalamandir IPO comprises a fresh issuance of Rs 600 crore worth of shares and an offer for sale (OFS) of up to 2.70 crore equity shares by the promoters and promoter group. The IPO allocation reserves up to 50% of the shares for Qualified Institutional Buyers (QIB), at least 15% for Non-Institutional Investors (NII), and a minimum of 35% of the offer for Retail Investors. The IPO lot size is 67 equity shares, with multiples of 67 equity shares thereafter.
IPO Objectives
The company plans to utilize the net proceeds from the IPO for various purposes, including financing capital expenditures for the establishment of 30 additional stores and two warehouses, working capital needs, debt repayment, and general corporate purposes.
Book Managers
Motilal Oswal Investment Advisors Ltd, HDFC Bank Ltd, and Nuvama Wealth Management Ltd are the book-running lead managers for the IPO, with Bigshare Services Private Ltd serving as the offer's registrar.
Market Buzz
Reliance Securities Ltd notes that the Indian ethnic wear industry, with its high client demands and intricate inventory management, is challenging to replicate. Ethnic clothing is now popular for various occasions beyond weddings, such as national festivals and special events. The brokerage recommends subscribing to the Sai Silks Kalamandir IPO, highlighting the company's strong brand recall, solid margins, and consistent growth potential.
Grey Market Premium
The grey market premium (GMP) for Sai Silks IPO stood at +7, consistent with the previous two trading sessions. This suggests that Sai Silks Kalamandir shares are trading at a premium of Rs 7 in the grey market as of Wednesday. Considering the upper end of the IPO price band and the current premium, the estimated listing price for Sai Silks Kalamandir shares is Rs 229 apiece, representing a 3.15% increase over the IPO price of Rs 222.
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