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CAMPUS ACTIVEWEAR LIMITED IPO ANALYSIS

Background

It is the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021. It was incorporated in 2005 and is a lifestyle-oriented sports and athleisure footwear company that offers a diverse product portfolio for the entire family. It offers multiple choices across styles, color palettes, price points and an attractive product value proposition. It has over 425 plus distributors across 28 states and 664 cities. It has 19,200 Geo-tagged retail touch points out of which 11,300 are covered by 152 internal sales team and 7,900 through distributor “Feet on Street” initiative. 

·       Strengths

Ø  Largest sports and athleisure footwear brand in India, both in terms of value and volume in Fiscal 2021.

Ø  Fastest growing scaled sports and athleisure footwear brand (scaled brands being brands with over ₹ 2 billion of revenue in Fiscal 2019) in India over Fiscal 2019 to Fiscal 2021.

Ø  One of the very few established Indian brands in a segment which is primarily dominated by international brands.

Ø  One of the most relevant brands in this segment, covering more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal 2021.

Ø  Sustained focus on design and product innovation facilitating access to the latest global trends and styles.

Ø  Robust omnichannel sales and distribution network with pan-India      presence and move to premium category.

Ø  Experienced management team. 

·       Footwear Styles

The styles of footwear can generally be categorized into the open footwear and closed footwear categories. Open footwear includes sandals and slippers. Closed footwear refers to footwear such as shoes and boots. Its consumers typically purchase open footwear as compared to closed footwear in the summer and rainy seasons. 

·       Manufacturing Facilities

They own and operate five manufacturing facilities across India with an installed annual capacity for assembly of 28.80 million pairs as on December 31, 2021. They have the ability to increase production for assembly of up to 35.50 million pairs on an annual basis. They have an in-house production capacity of 4.80 million footwear uppers and 10.80 million footwear soles along with a third-party annual capacity of 24.00 million footwear uppers and 18.00 million footwear soles.

·       Financials

 

·       Comparison with Listed Peers

·       IPO Details

IPO Opening Date

April 26, 2022

IPO Closing Date

April 28, 2022

Issue Type

Book Built Issue

Face Value

Rs. 5 per equity share

IPO Price Band

Rs. 278 to Rs. 292 per equity share

Market Lot

51 shares

Minimum Order Qty.

51 shares

Listing At

NSE and BSE

Total Issue Size

Up to 47,950,000 Equity Shares aggregating up to ₹ 1400.14 crores

Size Of Offer for Sale

Up to 47,950,000 Equity Shares aggregating up to ₹ 1400.14 crores

Employee Discount

Rs. 27 per equity share

QIB Allocation

50% of Net Offer

Retail Investors Allocation

35% of Net Offer

NII (HNI) Allocation

15% of Net Offer

·       IPO Tentative Timeline

IPO Opening Date

April 26, 2022

IPO Closing Date

April 28, 2022

Basis of Allotment Date

May 4, 2022

Initiation of Refunds

May 5, 2022

Credit of Share to Demat A/C

May 6, 2022

IPO Listing Date

May 9,2022

·       IPO Lot Size

The IPO market lot size is 51 shares. A retail-individual investor can apply for up to 13 lots (663 shares or ₹1,93,596). Therefore, minimum 1 lot size of 51 shares amounting to Rs. 14,892 and maximum 13 lots of total 663 shares amounting to Rs. 1,93,596.

·       Promoter Holding

Pre-issue Holding

78.21%

Post-issue Holding

74.1%

·       My Perspective about the IPO

As per F.Y. 2020-21 the IPO is priced at a PE Ratio of 165 times and if we extrapolate F.Y. 2021-22 earnings by annualizing, it is priced at a PE Ratio of 78 times which is still on the pricey side. So, the IPO is fully priced but looking at its brand positioning and robust omnichannel sales and distribution network with pan-India presence and sustained focus on design and product innovation, it looks good for a long term horizon.


Disclaimer: This blog is only for sharing my personal opinion for educational purpose. This is not an investment advice so please consult your financial advisor before investing.

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