Manyavar owned Vedant Fashions IPO Review (13 Things to know)
Vedant Fashions IPO (Manyavar IPO) Details
Kolkata based Manyavar owned Vedant Fashions IPO dates are announced now. Vedant Fashions is India’s leading men’s wedding and celebration wear segment. Its Manyavar brand is a category leader in the branded Indian wedding and celebration market. Company dares to come to IPO with aggressive pricing even though their revenues and margins are on declining mode. Should you invest in Vedant Fashions IPO?
Vedant Fashions IPO Review (Manyavar IPO) – 13 Things to know
1) What does Vedant Fashions Limited do?
Vedant Fashions is India’s largest men’s Indian wedding and celebration wear segment in terms of revenues and net profits. Company’s Manyavar brand is the category leader in the branded Indian wedding and the celebration wear market with a Pan India presence.
Company has established a multi-channel network and introduced brands by identifying gaps in the underserved and high growth Indian wedding and celebration wear category.
Company’s brands include (i) Manyavar, (ii) Mohey, (iii) Mebaz, (iv) Manthan, and (v) Twamev.
Company operates its business through franchise-owned exclusive brand outlets (EBOs), with the remaining by multi-brand outlets (MBOs), large format stores (LFSs), and online platforms, including its website (www.manyavar.com) and mobile application.
2) What are Vedant Fashions IPO Issue Details?
|IPO Opening Date||04-Feb-22|
|IPO Closing Date||08-Feb-22|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 1 per equity share|
|IPO Price band||Rs 824 to Rs 866 per equity share|
|Lot Size||17 Shares|
|Min Order Quantity||17 Shares|
|Listing at||BSE and NSE|
|Total Issue Size||Rs. 3149.19 Crores|
|OFS||Rs. 3149.19 Crores|
3) Vedant Fashions Limited – Competitive Strengths
1) Company is the market leader in the Indian celebration wear market with a diverse portfolio of brands catering to the aspirations of the entire family
2) It is a large and growing Indian wedding and celebration wear market driven by an increased spending on such wear
3) It has differentiated business model combining the strengths of retailing with branded consumer play
4) Company has Omni-channel network with the seamless integration of its offline and online channels
5) Technology-based strong supply chain and inventory replenishment systems driven by system-wide data analytics, strong processes and longstanding vendor relationships
6) Company has experienced and professional founder-led leadership team
4) Vedant Fashions IPO – Objects of the offer
Vedant Fashions IPO Size is Rs 3,149.19 Crores and these proceeds are for offer for sale.
Under Offer for sale (OFS), these funds would go to selling shareholders and company would not get any proceeds from the issue.
5) Vedant Fashions Limited – Promoter Info
Ravi Modi, Shilpi Modi and Ravi Modi Family Trust are the company promoters.
6) How is Vedant Fashions IPO Valuation?
Vedant Fashions IPO price band is Rs 824 to 866 per share.
If we consider last 3 years weighted average EPS of Rs 7 and the upper price band of Rs 866, P/E works out to be 124x.
Similarly, if we consider FY2021 EPS of Rs 5.36 and the upper price band of Rs 866, P/E works out to be 161x.
If we annualise last 6 months ending Sep-21 EPS, P/E works out to be 108x.
Means company is asking IPO price of Rs 866 in the P/E ratio of 108x to 161x
As per the RHP, there are no listed peers to compare. However, the P/E ratio of 108x to 161x in general is overpriced.
7) Vedant Fashions Limited – Financial Track Record
Here are the total assets, revenues and profits of the company in the last 2 years and 6 months.
|Financial Year ending / Period ending (Amt in Mns)|
|Profit After Tax||2,366.4||1,329.0||984.1|
8) Vedant Fashions IPO – Why to invest?
Here are the positive factors in this company.
- Company is the leader in Indian celebration wear market.
- Company has diversified portfolio of brands which caters to the entire family. Its well-known brands are Manyavar, Mebaz, Mohey, Manthan and Twamev.
9) Vedant Fashions IPO – Risk Factors in this IPO
- Company revenues are on declining mode. Its revenues were at Rs 947.9 Crores in FY20 Vs. Rs 625 Crores in FY21. Even for the last 6 months ending Sep-21, it posted revenue of Rs 387.2 Crores. One can attribute this decline in revenues are due to covid pandemic.
- The company’s margins have reduced from Rs 236.6 Crore in FY20 Vs. Rs 132.9 Crores in FY21. Again, one can attribute this decline is due to covid pandemic.
- The entire IPO Proceeds would be utilized for offer for sale and company would not get any funds out of it.
- The IPO price is overpriced in general.
- Covid pandemic has affected business in the past. Such pandemics are uncertain and company business might continue to affect in future too.
- Company business is highly concentrated on Indian wedding and celebration wear. Any change in customer preference can affect company business.
- Company generates business from its key brands. Any failure to maintain such brands can affect business.
- Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
10) What is Vedant Fashions IPO GMP?
GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market.
There are mixed reactions for offline trades on GMP. Some say these are available at 10% lower than issue price and some say Rs 80 as GMP.
11) Key dates of Vedant Fashions IPO
|Finalization of Allotment||11-Feb-22|
|Initiation of Refunds||14-Feb-22|
|Credit to Demat Account||15-Feb-22|
|IPO Shares Listing Date||16-Feb-22|
12) How to invest in Vedant Fashions IPO?
You can login to your demat account, visit the IPO section and apply for this IPO during the subscription dates.
If you do not have demat account, sign-up here for Zerodha demat account and follow the below steps.
- Visit the Zerodha portal and login to Console.
- Go to Portfolio and click the IPOs link.
- Visit ‘Vedant Fashions Limited IPO’ row and click the ‘Bid’ button.
- Enter your UPI ID, Qty and the Price which you want to bid.
- Click on ‘Submit’ IPO application form.
- Visit the UPI App (net banking or BHIM) to approve the mandate.
13) Vedant Fashions IPO Review – Should you invest or avoid?
You might be wondering whether Vedant Fashion IPO is good or bad for investment.
Vedant Fashions is leader in Indian celebration wear market. It has key brands like Manyavar, Mebaz, Mohey etc.,
Company revenues and margins are on declining mode due to covid pandemic.
Its issue price is overpriced. Not sure how companies are coming with IPO with such aggressive pricing and that too when stock markets are taking huge corrections in the last few weeks.
Considering all positive and risk factors, investors can stay away from such IPOs as of now. When such stocks are available at discounted price post listing, one can accumulate considering the valuations during that time.
Readers, do you think this would be another Zomato or Paytm or Policybazaar kind of IPO listing and get corrected there on to lower levels?
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