India’s leading ethnicwear company Vedant Fashions (Manyavar) has filed draft papers with market regulator SEBI (Security and Exchange Board of India) to raise funds via an initial public offer (IPO).
As per the DRHP (Detailed Red Herring Prospectus) of the company, the issue comprises a pure offer for sale (OFS) of up to 36.36 million shares by its existing promoter and shareholders.
The OFS has up to 17.46 million shares by Rhine Holdings Ltd.; up to 723,000 shares by Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF I and up to 18.18 million shares by Ravi Modi Family Trust.
Vedant Fashions, founded by Ravi Modi, is backed by India-focused private equity firm Kedaara Capital and its other brands include womenswear brand Mohey, family wear brand Mebaz, Twamev and Manthan.
Currently, Rhine Holdings has a 7.2 per cent stake, while Kedaara AIF holds a 0.3 per cent stake. Ravi Modi Family Trust has a 74.67 per cent stake in the firm.
The company is also aiming for a production capacity of 10 million pieces per annum.
The DRHP states that Vedant Fashions will not receive any proceeds from the offer. The objects of the offer are to achieve the benefits of listing the equity shares on the stock exchanges, and carry out the offer for sale of up to 36,364,838 equity shares by the selling shareholders.
The company expects that listing of the equity shares will enhance its visibility and brand image and provide liquidity to shareholders, and will also provide a public market for the equity shares in India.
“We intend to focus our expansion effects in markets where we determine there is an increasing demand for our products, and where we can leverage our existing presence to expand our market share. Through our cluster-based expansion strategy, we have identified several cities and towns in both existing geographies where we have a presence and new geographies where we plan to establish our first EBOs,” the firm said in the DRHP.
During the FY21, company’s revenues stood at Rs. 564.82 crore against Rs. 915.55 crore a year ago. Net profit for the period stood at Rs. 181.92 crore versus Rs. 311.84 crore last year.
According to CRISIL, Vedant Fashions is the largest company in India in the men’s Indian wedding and celebration wear segment in terms of revenue, OPBDIT and profit after tax for the FY 2020.
The company had a retail footprint of 1.1 million square feet covering 525 EBOs (Exclusive Brand Outlets), including 55 shop-in-shop, spread across 207 cities and towns in India and 12 EBOs across the US, Canada and the UAE. It aims to double its national footprint over the next few years.