Campus Activewear IPO: All You Need To Know
Sports and athleisure footwear brand Campus Activewear's IPO plans to raise up to Rs 1,400 crore
TPG-backed Campus Activewear Ltd., a sports and athleisure footwear brand, will launch its three-day initial public offering on April 26.
The IPO comprises sale of 4.79 crore shares by private-equity firm TPG, promoters and other shareholders. Meaning, the proceeds won't come to the company but its stakeholders.
The offer seeks to raise Rs 1,400.1 crore at the upper end of the price band of Rs 278-292 apiece. The issue values Campus Activewear at up to Rs 8,886.3 crore.
This is the second IPO to launch after the market witnessed a global equity selloff, leading to erosion of value for new-age companies such as Paytm (One97 Communications Ltd.) and Zomato Ltd.
Campus' maiden offer constitutes 15.76% of the post-issue equity. Promoters will hold 74.10% after the offer.
Issue Details
Issue opens on: April 26.
Issue closes on: April 28.
Issue size: Rs 1,400.1 crore.
Face value: Rs 5 apiece.
Lot size: 51 equity shares and multiples.
Listing on: BSE and NSE.
Lead managers: JM Financial, BofA Securities India, CLSA India, Kotak Mahindra Capital.
Business
Campus Activewear claims to be the largest sports and athleisure footwear brand in India by value and volume in fiscal 2021. Its market share for FY21 stood at 17%, according to its filing, and is among the few domestic brands in the sports segment dominated by international peers.
Its products cover 85% of the addressable market of shoes with price range of Rs 500-Rs 3,500 a pair. The company gets 59.4% of the revenue from sale of shoes priced below Rs 1,499 per pair.
The company sold 13 million (1.3 crore) pairs in fiscal 2021 and 13.65 million (1.37 crore) in nine months ended Dec. 31. The average selling price for April-December 2021 rose to Rs 615 from Rs 533 in FY21.
The company had 425 trade distributors directly servicing and fulfilling orders of over 19,200 geographically mapped retailers across India as of December.
The company has expanded its online presence through e-commerce marketplaces such as Flipkart, Myntra and Fynd, and online-to-offline business-to-business platforms like Udaan, apart from its own e-commerce website.
The company generated 67.71% of sales through trade distributors and 32.3% online in nine months through December.
Campus Activewear has manufacturing facilities in Dehradun, Baddi, Ganaur and Haridwar with an annual capacity to assemble 28.80 million (2.88 crore) pairs and ability to scale up to 35.5 million (3.55 crore) pairs a year.
Financials
Campus Activewear has been able to increase its operating margins by 100-150 basis points with its focus on premium shoes. It had a total borrowing of Rs 174.1 crore as of December.
Peer Competition
The company competes with global and domestic brands. Domestic listed peers include Bata India Ltd., Relaxo Footwears Ltd., Metro Brands Ltd., Khadim India Ltd. and Liberty Shoes Ltd.
Risk Factors
The company relies on trade distribution and direct-to-consumer channels for a majority of sales, and any disruption there or limitations in expanding this channel may adversely affect sales, cash flows and profitability.
The sports and athleisure footwear industry is highly competitive, and if it fails to compete effectively, its business, results of operations and financial condition may be adversely affected.
The Covid-19 pandemic has had, and is expected to continue to have, an unpredictable adverse effect on business, results of operations, financial condition and cash flows.
Environmental regulations monitored by governmental authorities like pollution control boards can impose costs and limitations on operations.
Failure to effectively promote or develop the brand could materially and adversely affect business performance.
Pricing pressure from customers may affect gross margin, profitability and ability to increase prices.
Its manufacturing facilities are located in India and the sales are primarily concentrated in north India. Any adverse developments affecting India could hit its business.
Brokerage View
Here's what brokerages have to say about the offer:
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