Iris Clothings Limited IPO

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(i) Kolkata based Iris Clothings Limited was incorporated in 2004, Iris Clothings Limited is engaged in the Manufacturing, Designing, Branding, and Selling of Kids Wear under the brand name DoReMe© in India.

(ii) DoReMe© caters to the Kids Wear category mostly juniors including various kinds of apparels and related products for all Infants, Boys, and Girls. They have been able to establish their brand Do Re Me© as a mid-market, comfortable and high-quality junior Kids Wear brand.

(iii) The Company makes different kinds of products like Tops, T-shirts, Pants, Shorts, Frock, Dresses, and Towels among others catering to Kids Wear category. The Company continuously strives to add new product lines and innovate with Designs to be able to appeal to the changing consumer demands.

(iv) As on date Company has an active distribution network of 60+ distributors across cities/states with reach to more than 4,000+ retailers. The Company has always believed in offering high-quality products at an affordable value and the same has helped the brand to develop a strong pull from the end customers and trade partners. The company was among the pioneers to start with printed Maximum Retail Price (MRP) in 2005 when this practice was relatively unknown in the unorganized Kids Wear Market.

Iris Clothings Limited IPO Stock Quote & Charts

92.50

+5.11%

  • Open: 90.00
  • High - Low: 93.00 - 90.00
  • Previous Close: 88.00
  • Total Traded Volume: 28800
  • Updated On: 06-Dec-2018

Objects of the Iris Clothings Limited IPO:

Objective of Iris Clothings IPO are: 1. To meet the incremental working capital requirements 2. To meet the Issue Expenses 3. For general corporate purposes

Iris Clothings Limited IPO Details:

Open Date: Oct 10 2018
Close Date: Oct 12 2018
Total Shares: 1,230,400
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 11.07 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 90 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 23 2018

Promoters And Management:

Promoters of Iris Clothings IPO Company are: (i) Mr. Santosh Ladha, aged about 40 years, is the Managing Director of the Company. Mr. Santosh Ladha holds a Bachelors degree in Commerce and has an experience of 22 years in this textile industry. He is the founder promoter of the Company and has conceptualized and externalized the brand “Doreme”. Mr. Santosh Ladha has an in-depth understanding of the domestic readymade apparels markets. Being a dynamic and toe marking personality, he looks after all the operations of the company directly with the help of a strong team. (ii) Mrs. Geeta Ladha, aged about 39 years, is the Whole Time Director of the Company. She holds a Bachelors Degree in commerce and has an experience of 14 years, with an unmatched exuberance in providing creative and innovative ideas to update the products and has been with the company since its inception.

Financials of Iris Clothings Limited IPO:

Particulars For the year/period ended (in Rs Lacs)
31-Mar-2018 31-Mar-17 31-Mar-16 31-Mar-15 31-Mar-14
Total Assets 3,978.58 3,182.40 2,661.01 2,968.46 2,893.88
Total Revenue 5,310.12 4,689.14 3,699.20 3,009.49 2,498.51
Profit After Tax 337.90 159.73 64.61 24.23 68.08

Comparison With Peers:

Company FV Mcap(cr) EV(cr) EPS P/E Adj. P/E RONW Mcap/sales
IRIS Clothing 10 42 61.87 7.22 12.5 18.42 13.5% 0.79
S P Apparel 10 611 759 19 12.78 15.84 11.30% 0.95
Ashapura Intimates Fashion 10 344 451 31 5.77 7.47 27.00% 0.90
Indian Terrain 2 477 465 6.71 18.63 18.18 12.00% 1.18
Note: 1. The Valuation must be looking tempting for Ashapura Intimates Fashion. However, I would like to clarify that the Share Price is continuously falling from the highs of 435 on 25.09.2018 and now standing at 179 in just 15 Days. Something wrong with the company so don't invest there. 2. The Valuation w.r.t Peers appears to be fully priced in. 3. TheFY18  Financials are taken for calculations. Source: Moneycontrol and DRHP

Recommendation on Iris Clothings Limited IPO:

Review and Recommendation of Iris Clothings IPO from our side is: [ The Issue looks fully priced in w.r.t Adj P/E. The companies of the Textile sector are not performing well in the bourses. The competition is really tough in the sector both from organized and unorganized players. The Condition of the balance sheet is poor. Moreover, the condition of the overall market is also poor and better investment opportunities are available in the market. ]

Lead Manager of Iris Clothings Limited IPO:

  1. VC Corporate Advisors Private Limited

Registrar of Iris Clothings Limited IPO:

  1. Cameo Corporate Services Limited

Company Address:

Iris Clothings Limited 103/24/1, Foreshore Road Shibpur, Binani Metal Compound Howrah - 711102 Phone: +91 33 26373856 Email: accounts@irisclothings.in Website: www.doreme.in

Bid Details of Iris Clothings Limited IPO as on
12-Oct-2018 17:00:00 IST

Category No.of shares offered No. of shares bid
584,000 1,176,000
584,000 156,800
62,400 62,400
1,230,400 1,395,200
QIBs No
QIBs+HNIs Subscription 2.01X
Retail Subscription 0.27X
Total Subscription 1.14X

Discussion on Iris Clothings Limited IPO:

    Todays listing updates :

    Garden Reach (Main Board) – 104 at BSE & 102.50 at NSE (IPO Price – 118)

    A1 Acid (Guiness) – 61 at BSE SME .. IPO price 60

    Dolphin Rubbers (Guiness) – 27.50 at BSE SME .. IPO price 26

    Kritika Wires (Hem) – 34.10 at Emerge … IPO price 32

    Silgo Retail (Aryaman) – 36.45 at Emerge … IPO price 36

    All SMEs of dubious LMs listed at premium … due to almost NIL public participation.

    The Revenue and PAT growth shown by the company in the last 5 years is excellent.
    Revenue Growth= 20%
    PAT Growth= 49%

    However, the weak balance sheet overshadows all the good work done by a company in term of Sales growth. Once the position of the balance sheet improves this can look for investment purpose.

    In terms of EV/EBITDA based on FY18 numbers, the value is above 10 which is again high.

    The Average EPS of the last three years.
    2016= 2.46
    2017= 6.07
    2018= 7.22( Post IPO Dilution)

    Average EPS= 5.25
    P/E= 17.14

    In many forums/websites, you will find the P/E to below 10. They have actually calculated considering Q1FY19 numbers and then Annualized it. This formula works fine but to be on the safer side we should always calculate EPS by considering the last 3 years Average EPS because many times just before the IPO lot of manipulation done in financials.

    Balance Sheet Diagnosis based on FY18 Financials

    1. D/E=~2( High).

    2. Current Ratio=24/23=1.04 ( Not comfortable).Should be at least greater than 1.5.

    3. Quick Ratio= 13/23= .56 ( Not comfortable).Should be at least greater than 1.

    4. Long-term Debt/Working Capital= 6( Not comfortable).Should be at less than 1.

    Conclusion: The Company’s Balance Sheet is in very poor shape.

    (i) Shares Issued before the Issue- 34,30,779 Equity Shares.
    (ii) Present Issue= 12,30,400 Equity Shares.
    (iii) Total Shares after the Issue= 46.61,179

    *Ultra Wiring Connectivity System* is coming with an SME IPO on NSE Emerge Platform.

    The company is engaged in the business of manufacturing of Couplers, Connectors and allied products for automobiles. The Company has Manufacturing Plant situated near Delhi at HSIDC Industrial Area, Faridabad.

    Issue Details:
    Issue Opening: October 12, 2018
    Issue Closing: October 17, 2018
    Issue Price: Rs. 35 per equity share
    Lot size: 4000 Equity shares

    *Apparent Advisors LLP* is acting as sole advisors for this IPO on NSE Emerge Platform.