Sai Silks (Kalamandir) Limited is gearing up for its Initial Public Offering (IPO), scheduled to open for subscription on September 20, 2023. Sai Silks (Kalamandir) IPO, a prominent player in the ethnic apparel and value-fashion products industry, has piqued the interest of investors. In this comprehensive article, we will provide you with a detailed overview of the Sai Silks (Kalamandir) IPO, including key dates, vital company information, potential strengths and risks, and an extensive review to assist investors in making informed decisions.
Sai Silks (Kalamandir) IPO Details
| IPO Opening Date | 20-Sep-23 |
| IPO Closing Date | 22-Sep-23 |
| IPO Listing Date | 04-Oct-23 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 2 per equity share |
| IPO Price band | Rs 210 to Rs 222 per equity share |
| Lot Size | 67 Shares |
| Listing at | BSE and NSE |
| Total Issue Size | Rs. 1201 Crores |
| Fresh issue | Rs. 600 Crores |
| OFS | Rs. 601 Crores |
IPO Timetable
| IPO Opens on | 20-Sep-23 |
| IPO Closes on | 22-Sep-23 |
| Basis of Allotment | 27-Sep-23 |
| Initiation of Refunds | 29-Sep-23 |
| Credit of Shares to Demat | 03-Oct-23 |
| Listing Date | 04-Oct-23 |
| Cut-off time for UPI mandate confirmation | 22-Sep-23 |
About Sai Silks (Kalamandir) Limited
Founded in 2005, Sai Silks (Kalamandir) Limited has established itself as a prominent provider of ethnic apparel and value-fashion products. Drawing inspiration from India’s rich culture, traditions, and heritage, the company offers a diverse range of products. This includes premium sarees suitable for weddings, party wear, daily wear, lehengas, men’s ethnic wear, children’s ethnic wear, and value fashion products catering to women, men, and children.
Sai Silks operates through four distinct store formats:
Kalamandir: This format offers contemporary ethnic fashion suitable for middle-income customers. It includes a variety of sarees, such as Tusser, Silk, Kota, Kora, Khadi, Georgette, Cotton, and Matka.
VaraMahalakshmi Silks: Catering to premium ethnic silk sarees and handlooms, this format targets wedding and occasional wear. It features sarees like Banarasi, Patola, Kota, Kanchipuram, Paithani, Organza, and Kuppadam, with a focus on handlooms such as Kacheepuram silk sarees.
Mandir: This offers ultra-premium designer sarees targeting high-net-worth individuals. The collection includes designer sarees like Banarasi, Patola, Ikat, Kanchipuram, Paithani, Organza, and Kuppadam.
KLM Fashion Mall: This focuses on value fashion at affordable price points. It includes fusion wear, daily wear sarees, and western wear for women, men, and children.
Apart from physical stores, Sai Silks reaches customers through e-commerce channels, including its website sskl.co.in and various online e-commerce marketplaces.
As of July 31, 2023, the company has an impressive presence with over 54 stores in four South Indian states, namely Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu, covering an aggregate area of approximately 603,414 square feet. The company’s revenues for the fiscal years 2023, 2022, and 2021 were Rs. 13,514.69 million, Rs. 11,293.23 million, and Rs. 6,772.48 million, respectively.
Financial Snapshot Sai Silks (Kalamandir) IPO
Here’s a snapshot of Sai Silks (Kalamandir) IPO’s financials:
| Financial Year ending / Period ending (Amt in Crores) | ||||
| Particulars | FY20 | FY21 | FY22 | FY23 |
|---|---|---|---|---|
| Assets | 692.76 | 665.42 | 842.49 | 1,220.45 |
| Revenue | 1178.62 | 679.10 | 1,133.02 | 1,358.92 |
| Profit After Tax | 42.1 | 5.13 | 57.69 | 97.59 |
| Net Worth | 231.51 | 242.99 | 300.66 | 397.33 |
| Reserves and Surplus | 208.05 | 218.93 | 276.60 | 373.27 |
| Total Borrowing | 164.7 | 217.22 | 260.49 | 345.50 |
Objects of the IPO
The Sai Silks (Kalamandir) IPO offers a compelling investment opportunity.
The IPO comprises both a fresh issue and an offer for sale (OFS). The proceeds from the OFS will benefit selling shareholders, while the fresh issue’s net proceeds will be allocated for the following objectives:
- Funding capital expenditure towards setting up 25 new stores.
- Funding capital expenditure towards setting-up of two warehouses.
- Funding the working capital requirements of the company.
- Repayment or pre-payment, in full or part, of certain borrowings availed by the company.
- General corporate purposes.
IPO Valuation of Sai Silks (Kalamandir) IPO
Sai silks kalamandir IPO price band is Rs 210 to 222 per share.
- If we consider last year FY23 EPS of Rs 8.11, P/E ratio works out to be 27x.
- If we consider last 3 years weighted EPS of Rs 5.72, P/E ratio works out to be 39x.
- The listed peers like Trent Limited trading at P/E 163x (Highest) and Shoppers Stop Limited is trading at P/E of 69x (Lowest) and industry average P/E is 98x. Hence, the IPO Price band at P/E of 27x to 39x is attractively priced.
What is Sai silks Kalamandir IPO GMP today?
While it is difficult to get authentic source, Sai Silks Kalamandir IPO GMP is being indicated as Rs 1 to Rs 3 on some of the websites and comments.
Sai Silks (Kalamandir) IPO – Positive Factors and Key Strenghts
- Diverse Product Portfolio: The company’s wide range of offerings reduces dependence on any single product category.
- Steady Revenue Growth: Sai Silks (Kalamandir) has consistently demonstrated revenue growth, indicating a strong market presence.
- Forward-Looking Approach: The company’s expansion plans and strategic acquisitions signal its readiness for the future.
- Attractive valuations: The IPO price is attractively priced.
Sai Silks (Kalamandir) IPO – Negative or Risk Factors
- The Offer Price, market capitalization to total revenue multiple, and price to earnings ratio may not reflect the market price of Equity Shares upon listing.
- Our business heavily relies on women’s saree sales and is susceptible to changes in demand and consumer preferences, potentially impacting our business, financial results, and operations.
- Current store locations may become unattractive, and finding suitable new locations at reasonable terms could be challenging, with leasing real estate posing risks.
- Most of our sales are generated from stores in Southern India, and any negative developments in this region may affect our revenue and operations.
- The COVID-19 pandemic has had a significant impact on our business, and its future effects on customer visits and business prospects remain uncertain, potentially affecting our financial performance and Equity Shares price.
- We have entered a business assets transfer agreement to acquire Sai Retail India Limited’s assets, and failure to realize expected benefits or future acquisitions, partnerships, or purchases may adversely affect our financial condition.
- Our Promoter has pledged Equity Shares and has agreements with lenders. If the lenders exercise their pledge or enforce it, it may dilute Promoters’ shareholding, potentially affecting our business and prospects.
- The Proforma Financial Statements in this Red Herring Prospectus do not reflect our future financial condition or operational results.
Also Read: SignaturesGlobal India IPO Review – Is this good or bad for investment?
Sai Silks Kalamandir IPO Review – Should you invest or Avoid?
This IPO provides both opportunities as well as risk factors. Here are the pros and cons of investing in this IPO.
Pros:
- Diverse Product Range: Wide variety of ethnic and value-fashion products.
- Revenue Growth: Consistent revenue growth showcases market strength.
- Forward-Thinking: Expansion plans and acquisitions signal preparedness for the future.
- Sai Silks Kalamandir share price is attractively priced.
Cons:
- Reliance on saree sales, susceptible to market changes.
- Store location challenges and leasing risks.
- Majority of sales from Southern India.
- Ongoing COVID-19 uncertainty.
- Risks in business assets transfer and future deals.
- Promoter’s pledged shares with lenders.
- Proforma Financial Statements don’t predict future finances.
Investors can consider all positive and negative factors and invest in this IPO.
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