Vedant Fashions Limited IPO (Manyavar IPO)

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i. 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 Financial Year 2020. Company focus on spreading India’s vibrant culture, traditions and heritage through the aspirational yet value for money brands at a diverse range of price point.

ii. Vedant Fashions is focused on further enhancing its leadership position in the organized Indian wedding and celebration wear market and establishing their dominance in the premium and value segments of the men’s Indian wedding and celebration wear market through their brands, Twamev and Manthan, respectively, and in the women’s Indian wedding and celebration wear market through its brand, Mohey, launched in 2015

iii. Company had a retail footprint of 1.1 million square feet covering 525 EBOs (including 55 shopin-shops) spanning across 207 cities and towns in India, and 12 EBOs overseas across the United States, Canada and the UAE, which are countries with a large Indian diaspora. In addition to its offline retail presence, Their consumers also have the option of placing orders through their website (www.manyavar.com), or mobile application, and through leading lateral e-commerce platforms.

Competitive Strengths

i. Market leader in the Indian celebration wear market with a diverse portfolio of brands catering to the aspirations of the entire family.
ii. Large and growing Indian wedding and celebration wear market is driven by increased spending on such wear. • Differentiated business model combining the strengths of retailing with branded consumer play.
iii. Omni-channel network with the seamless integration of the online and offline channels.
iv. Experienced and professional founder-led leadership team.

Objects of the Vedant Fashions Limited IPO (Manyavar IPO):

The objects of the Offer are to (i) achieve the benefits of listing the Equity Shares on the Stock Exchanges (ii) carry out the Offer for Sale of up to 36,364,838 Equity Shares by the Selling Shareholders
DRHP of Vedant Fashions Limited IPO (Manyavar IPO)
RHP of Vedant Fashions Limited IPO (Manyavar IPO)

Vedant Fashions Limited IPO (Manyavar IPO) Details:

Open Date: Feb 04 2022
Close Date: Feb 08 2022
Total Shares: 36,364,838
Face Value: ₹ 1 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 3,149.19 Cr.
Lot Size: 17 Shares
Issue Price: ₹ 824-866 Per Equity Share
Listing At: NSE,BSE
Listing Date: Feb 16 2022

Promoters And Management:

i. Ravi Modi is the Chairman and Managing Director of the Company. He has studied commerce from St. Xavier’s College, Calcutta University. He has been associated with the Company since its inception. He has more than two decades of experience in the garment industry. He oversees the design and marketing functions of the Company and together with the senior management is responsible for implementation of strategy in respect of such functions. ii. Shilpi Modi is the Whole-time Director of the Company. She has studied commerce from Allahabad University. She has been associated with the Company since its inception. She has more than two decades of experience in the garment industry. She handles the digital strategy and product lifecycle of the Company and together with the senior management is responsible for implementation of strategy in respect of such functions. iii. Sunish Sharma is a Nominee Director of the Company. He holds a bachelors’ degree in commerce (hons.) from the University of Delhi and a post graduate diploma in computer aided management from Indian Institute of Management, Calcutta, where he was awarded the Dr. Jogendra Kumar Chowdhury Gold Medal. He has also passed the final examination held by the Institute of Cost and Works Accountants of India (now known as Institute of Cost Accountants of India) and is a qualified cost accountant.

Financials of Vedant Fashions Limited IPO (Manyavar IPO):

 
Particulars (in Lakhs) Sep-21 Mar-21 Mar-20 Mar-19
Sales 35,984 56,482 91,555 80,074
Cost of Material Consumed 4,868 6,557 10,750 8,623
Purchases of Stock-In-Trade 5,821 7,076 16,824 13,674
Changes in Inventories -1,639 1,000 -2,452 -38
Employee Benefits Expense 2,303 3,811 5,330 4,721
Other Expenses 8,593 13,731 21,728 19,513
Operating Profit 16,038 24,307 39,375 33,581
OPM % 44.57% 43.03% 43.01% 41.94%
Other Income 2,745 6,020 3,243 1,906
Interest 1,224 2,582 2,561 1,963
Depreciation 4,312 9,553 8,873 6,430
Profit before tax 13,247 18,192 31,184 27,094
Total Tax Exps 3,407 4,901 7,520 9,451
Net Profit 9,841 13,290 23,664 17,643
NPM % 27.35% 23.53% 25.85% 22.03%
No. of shares 2,427 2,427 2,427 2,427
EPS in Rs 4.01 5.36 9.45 7.04

Comparison With Peers:

There are no listed companies in India that engage in a business similar to this.

Recommendation on Vedant Fashions Limited IPO (Manyavar IPO):

Review and Recommendation of  Vedant Fashions by InvestorZone is 4/10 1. The company has grown well between FY19 to FY20 from 800 Crores to 915 Crores, but same was impacted in FY21 due to COVID-19. And, impact is still visible in FY22 revenue as well. However, company is generating good cash-flow from operations and it is debt free. 2. They operate an omni-channel network and engage with the customers through an integrated platform serviced by the online and offline channels. They have created a brand called Manyawar especially for the wedding market which is very famous among the consumers. 3. They are 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 Financial Year 2020. 4. They are asset-light in respect of of plant, property and equipment which enables them to achieve a high return on capital employed, primarily due to the nature of the sourcing and manufacturing operations, with a substantial majority of the sales being generated through its franchisee-owned EBOs. 5. The problem with company is the valuation at which they are offering shares. They are offering shares at P/E of ~100x. And, whole IPO is OFS, so not a single rupee will go to company.

Lead Manager of Vedant Fashions Limited IPO (Manyavar IPO):

  1. Axis Capital Limited
  2. Edelweiss Capital Limited
  3. ICICI Securities Limited
  4. IIFL Holdings Limited
  5. Kotak Mahindra Capital Company Limited

Registrar of Vedant Fashions Limited IPO (Manyavar IPO):

  1. Kfin Technology Private Limited

Company Address:

Vedant Fashions Limited Paridhan Garment Park, 19, SDF-1, 4th Floor, A501-502, Kolkata 700 015, West Bengal, India Phone: +91 33 6125 5495 Email: complianceofficer@manyavar.com Website: https://www.vedantfashions.com/

Discussion on Vedant Fashions Limited IPO (Manyavar IPO):

3 Comments

    Valuation.

    1. Total Outstanding Shares = 242,694,774
    2. IPO Price = 866
    3. Mcap = ~21000 Crores….
    4. PAT (FY22) = ~200 Crores
    5. EPS = 8.26
    6. P/E = 104 ( Very high)….

    Reply

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