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Credo Brands (Mufti Jeans) IPO Details: Date, Share Price, Size, GMP & Review

Credo-Brands-(Mufti-Jeans)-IPO-Details-Date,-Share-Price,-Size,-GMP-&-Review

Mufti Jeans (Credo Brands Marketing) – About the Company

Mufti Jeans is the flagship brand name of Credo Brands Marketing Limited which offers casual clothing for men. Incorporated in 1999, the company offers a wide range of fashion clothing including sweatshirts, jeans, chinos, jackets, cargos, blazers and sweaters.

In 1998 the company was making only shirts, T-shirts and trousers for men but now it is offering a wide of products for different categories from relaxed casual wear for vacations or getaways to party wear, athleisure, urban casual wear and authentic everyday wear.

The company is operating with 15 designers and other members who have created and produced more than 1,348 designs in FY23. The company has extended its retail outlets from major metropolitan areas to Tier 3 cities and has a presence in 582 cities as of March 2023.

And as of May 2023, the company has 1,773 retail outlets across India, out of which,305 multi-brand stores (MBOs), 379 exclusive brand stores (EBOs) and 89 large format stores (LFSs). Moreover, the company also sell its products online and has tie-ups with leading e-commerce websites like Amazon, Flipkart, Myntra and AJIO to sell its products directly to the customers.

Credo Brands (Mufti Jeans)IPO Objectives

The entire issue size of Rs 549.78 crore is offered for sale up to 19,634,960 Equity Shares, hence the company is going to get any funds from this IPO, as the promoters and shareholders are reducing some of their stakes in the company to monetize their holdings.

However, one of the objectives of Credo Brands' (Mufti Jeans) IPO is to enjoy the benefits of listing the Equity Shares on the Stock Exchanges. And enhance the brand image and visibility of the company, at the same time also providing the opportunity to the Shareholders to liquidate their holdings and become a publically listed entity in India.

Credo Brands (Mufti Jeans) IPO Details:

IPO Open Date 19-Dec-23
IPO Close Date 21-Dec-23
Basis of Allotment 22-Dec-23
Listing Date 27-Dec-23
Face Value Rs 2 per share
Price Rs 266 to Rs 280 per share
Lot Size 53 Shares
Total Issue Size 19,634,960 shares
(aggregating up to Rs 549.78 crore)
Fresh Issue No Fresh Issue
Offer For Sale 19,634,960  Shares, aggregating up to Rs 549.78 crore
Issue Type Book Built Issue IPO
Listing At BSE & NSE
QIB Shares Offered Not more than 50% of the Net Issue
Retail Shares Offered Not less than 35% of the Net Issue
NII (HNI) Shares Offered Not less than 15% of the Net Issue

 

Credo Brands (Mufti Jeans) IPO Issue Price & Size

Credo Brands (Mufti Jeans) IPO issue is set between Rs 266 to Rs 280 per share. Investors can bid within these price ranges to become eligible for the IPO application. The total issue size of Credo Brands (Mufti Jeans) IPO is Rs 549.78 crore and the entire issue is offered for sale up to 19,634,960 Equity Shares by the promoters and shareholders of the company.

Credo Brands (Mufti Jeans) IPO Launch Date

Credo Brands (Mufti Jeans) IPO launch date is declared and the IPO will be open on 19 Dec 2023 and closed on 21 Dec 2023. The date for the basis of allotment is 22 Dec 2023, refunds of funds or credit of shares into a demat account will be organized on 26 Dec 2023, while the date of listing of Credo Brands (Mufti Jeans) IPO is set on 27 Dec 2023.

Credo Brands (Mufti Jeans) Financial Statements:

Particulars (Rs in Million) FY23 FY22 FY21 CAGR
Revenue from Operations 4,981.82 3,411.72 2448.26 42.65%
Other Income 111.4 136.63 163.28
Total Income 5,093.22 3,548.35 2,611.54 39.65%
Operational Expenses 2387.04 1762.43 1468.64
Other expenses 956.28 698.32 494.81
EBITDA 1749.9 1087.6 648.1 64.32%
EBITDA Margin% 35.13% 31.88% 26.47%
Depreciation 534.30 458.85 440.81
Interest 177.48 150.42 167.20
Profit Before Tax 1038.12 478.33 40.08  
Total tax 262.98 120.93 5.67
PAT 775.14 357.40 34.41 374.62%
PAT Margin% 15.56% 10.48% 1.41%  
EPS Basic (Rs) 12.06 5.60 0.54  

Source: DRHP

Credo Brands (Mufti Jeans) Financial Performance

The revenue of Credo Brands (Mufti Jeans) stood at Rs 498.18 crore in FY23 which grew at a CAGR of 42.65% from Rs 244.83 crore in FY21. And thanks to better operating margins, the EBITDA of the company reached at Rs 174.99 Crore in FY23 from Rs 64.81 Crore in FY21. The EBITDA during the same period registered a CAGR growth of 64.32%.

The Net Profit of the Credo Brands (Mufti Jeans)was Rs 77.51 crore in FY23 which was only Rs 56.7 lakhs in FY21. The PAT has grown exceptionally CAGR of 374.62% between FY21 to FY23. The EBITDA margin of the company stood at 35.13% in FY23, which was 26.74% in FY21, while the PAT margin in FY23 was 15.56% which was only trailing at 1.41% in FY21.

Credo Brands (Mufti Jeans) IPO Promoters & Shareholders

Kamal Khushlani and Poonam Khushlani are the main promoters of the company holding 33.84% and 27.62% stakes in the company respectively. While other promoter’s group members are Poonam Khushlani and Andrew Khushlani holding a 2.91% stake each in the company. For other promoters and shareholders, details check the table below.

S.No. Name of the Shareholder No. of Equity Shares held % of pre-Offer Shareholding
1 Kamal Khushlani 22,260,420 33.84%
2 Poonam Khushlani 18,164,380 27.62%
  Total (A) 40,424,800 61.46%
 
Promoter Group Members
1 Sonakshi Khushlani* 1,914,000 2.91%
2 Andrew Khushlani* 1,914,000 2.91%
3 Indira Gajra Nil Nil
4 Kennedy Ram Gajra Nil Nil
5 G.G. Automotive Gears Limited Nil Nil
  Total (B) 3,828,000 5.82%
       
Other Selling Shareholders
1 Concept Communication Limited 2,032,260 3.09%
2 Bela Properties Private Limited 5,031,260 7.65%
3 Jay Milan Mehta 1,970,220 3.00%
4 Sagar Milan Mehta 1,970,220 3.00%
  Total (C) 11,003,960 16.74%
 
  Grand Total (A+B+C) 55,256,760 84.02%

*Also participating as a Selling Shareholder in the Offer, Source: DRHP

As per the offer for the document (DRHP), the promoter selling shareholders are Kamal Khushlani (up to 4,140,000 equity shares), and Poonam Khushlani (up to 4,275,000 equity shares). While in the promoter group selling shareholders are Sonakshi Khushlani (up to 108,000 equity shares), and Andrew Khushlani (up to 108,000 equity shares).

Other selling shareholders are Concept Communication Limited (up to 2,032,260 equity shares), Bela Properties Private Limited (up to 5,031,260 equity shares), Jay Milan Mehta (up to 1,970,220 equity shares), and Sagar Milan Mehta (up to 1,970,220 equity shares).

Why Invest in Credo Brands (Mufti Jeans) IPO?

While investing in the Credo Brands (Mufti Jeans),there are various things you need to check before buying the IPO. Check the fundamentals of the company and analyse the various factors to know the strength of the company that helps to grow its business and revenue. At the same time, you also check the risk factors that can affect the business of the company.

Also Read: What are the Risk Factors Involved in Applying for an IPO

Strengths:

  • The clothing industry in India has grown well in the last decades and further, there is too much scope in the clothing and fashion wear industry. Mufti Jeans has brand visibility in the market going to get advantages with the growth of the clothing industry.
  • Mufti Jeans has strong brand equity with a presence across the categories in clothing for multiple occasions. It offers shirts t-shirts jeans chinos jackets, which cater to all year-round clothing with a prominent focus on casual wear.
  • The company is operating with a multi-channel pan-India distribution network of 1,773 touchpoints consisting of 379 EBOs, 89LFS and 1,305 MBOs, with our reach extending from major metros to Tier-3 cities. Apart from its offline presence, it has also an online presence to sell its products through its website and various e-commerce marketplaces.
  • Credo Brands works with a scalable asset-light model using its economies of scale by driving efficient partnerships from the back end to the front end without need to invest in developing manufacturing facilities. This structure provides agility with the longstanding sourcing partners allowing the company to increase or decrease the supply based on the demand from various channels.
  • Furthermore, the company also believe in outsourcing the manufacturing, to continue to maintain oversight over each stage of the process, with the centralized ordering of fabric and accessories to meet timelines for each stage of production by its manufacturing partners
  • Credo Brands for Mufti Jeans has strong in-house design competencies to deliver innovative and high-quality products with end-to-end tech-enabled supply chain capabilities. To achieve that company has an in-house textile print and pattern team, comprising of experienced graphic designers, illustrators, textile designers, and technicians. To deliver different designs to our consumers season on season.
  • Credo Brands is led by an experienced Promoter and senior management team providing strategic direction to the company with the vision and guidance of expertise to manage and grow the business while keeping the objectives in mind.
  • At financial performance end, Company is doing well in terms of growth in its revenue and net earnings. The revenue and EBITDA of the company, grew at CAGR of more than 42% and 64% respectively between FY21 to FY23. Due to better operating and net profit margins, the net profit of the company during the same period grew at a CAGR of 374% during the same period.
  • Credo Brands has also tried to ensure that the reis limited leverage on the balance sheet of the company by reducing the debts. In FY21 it had total borrowings of Rs 15.22 crore which has been reduced and in FY23 at Rs 10.08 crore.

Risks:

  • The business of Credo Brands or Mufti Jeans is primarily concentrated on the sale of men's casual western wear and is vulnerable to variations in demand and changes in consumer preferences which could have an adverse effect on the business that can result in its operations and financial condition.
  • All the products of Credo Brands are sold under a single brand, ‘Mufti’. Any inability to effectively market the products under the same brand name, or any deterioration in public perception towards the brand, could affect consumer footfall and consequently adversely impact the business of the company.
  • Furthermore, the inability of the company to grow its business across emerging markets in India and effectively manage or expand its retail network may adversely impact its business, which will also affect the business operations and financial condition of the company.
  • As the company design its products in-house, it is relying on outsourcing the manufacturing of finished products to third-party manufacturing partners, without exclusivity arrangements. And incapability to acquire required quantities of apparel of the desired quality on time and at the reasonable pricing, or supply shortage due to disruption or shutdown in third party manufacturing partners’ operations and performance, could adversely affect the business and financial performance of the company.
  • As the company sells seasonal clothing, its business is subject to seasonality. Owing to this seasonal effect the lower sales and revenue may adversely affect the business operations, and revenue of the company, especially for that period.
  • The company is dependent on third-party manufacturing partners for its finished products. If it may not be able to procure sufficient quantity or quality of finished goods from its manufacturing partners in a timely manner and at an acceptable price, this may adversely affect the business.
  • Its business depends on continual purchases of its products and timely payments by the franchise stores, both in the short and long term. Any delay or failure in the sale of products or payments at its franchise stores or any disputes with them may adversely impact its business.
  • The company operates in highly competitive markets in all the product segments in both offline and online channels and an inability to compete may adversely affect the business of the company.
  • Furthermore, pricing pressure from the competitors may affect our ability to maintain or increase the product prices and, in turn, the revenue from product sales, gross margin and profitability, which may materially and adversely affect the revenue income of the company.
  • The company do not have any definitive agreements with the manufacturing partners and third-party suppliers for the supply of raw materials, merchandise and apparel. The company also does not have fixed terms of trade with the majority of its manufacturing partners or third-party suppliers for the supply of products.
  • Additionally, failure to comply with quality control processes may have an adverse impact on the business operations and financial conditions of the company.
  • Finally, the inability to adequately obtain, maintain,  protect,  and enforce intellectual property rights including 'Mufti', and the inability to protect or use its intellectual property rights may also adversely affect the reputation and business operations of the company.

Credo Brands (Mufti Jeans) IPO Grey Market Premium

The Grey Market Premium (GMP) is a type of speculative price of an unlisted share of a company that has launched its IPO and going to list very soon on the stock exchanges. However, the GMP remains stable and keeps fluctuating as the demand and supply of shares in the grey market till the date of the listing. It is also not a reliable factor to know the share price of any company, instead proper valuation of and comparison with its peer group is more reliable.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

However, as per the latest news and online sources, the Grey Market Premium (GMP) of the Credo Brands (Mufti Jeans) is at around Rs 100, or you can say 35% above the upper band of the IPO price of Rs 280. That shows the stock of Brands (Mufti Jeans) is going to list around or above Rs 380providing a good opportunity for investors to get listing gains.

Credo Brands (Mufti Jeans) IPO Review & Analysis

As per the net earnings at the financial year end of March 2023, the earrings per shares (EPS) of the company was Rs 12.06. The Net Assets Value (NAV) of the company is at Rs 43.75. And at the valuation end, if you consider the upper price band of the IPO of Rs 280, its share price is at a P/E of 23.22.

However, when you compare Credo Brands (Mufti Jeans) with its nearest peers, like Go Fashion (India) Limited, Arvind Fashions Limited, Kewal Kiran Clothing Limited and Aditya Birla Fashion & Retail Limited they are trading at P/E of 88.24, 157.08, 23.22 and negative respectively. This shows the share price of Credo Brands (Mufti Jeans)is fairly priced, hence you can subscribe the issue with the listing gain to medium or long-term investment prospects.

How to Apply for Credo Brands (Mufti Jeans) IPO?

To apply in any IPO or in Credo Brands IPO or invest in the stock market you must have a trading and demat account with any registered broker. If don't have both or any one of the accounts, you can apply here at Moneysukh to open a trading account and demat account with online trading or investing in equities, commodities and the forex market.

Also Read: Trading or Investing Which is Better and More Profitable

Moneysukh is one the best discount brokers in India and provides the best trading platform through Trade Radar and TradingView. You can get here the best trading and investing facilities to apply in the IPOs or trade in the secondary market. If you are already a customer of Moneysukh and have a trading and demat account you just need to the steps given below.

Also Read: Benefits of Investing in the Stock Market: Advantages of Share Market

Steps to Apply for Credo Brands (Mufti Jeans):

Step 1: Go to your computer browser and open trade.moneysukh.com.

Step 2: Now you have to use your User ID & password to log in and proceed.

Step 3: Here just navigate to the IPO section and select the Credo Brands or Mufti Jeans IPO.

Step 4: Now you have to fill in the details asked here like price, quantity, and so on.

Note: At the time of applying in any IPO, bid at the cutoff price and then submit your application. 

Step 5: Now before submitting your application successfully, make the payment.

How to Check Credo Brands (Mufti Jeans) Allotment Status?

The allotment procedure in an IPO is performed 3 to 4 days after the closing date of the IPO. The basis of allotment shares in Credo Brands (Mufti Jeans) IPO is going to be organized on 22, Dec 2023. And from this date onwards you can check the Credo Brands (Mufti Jeans)IPO allotment status. You can use various online sources to check the Credo Brands (Mufti Jeans) IPO allotment status like broker or BSE and NSE, using your IPO application and PAN card details.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

The allotment for retail, HNI category and other categories all are organized and completed on the same date. But if the IPO is oversubscribed into multiple times, then your chances are less for getting the allotment of shares in the Credo Brands IPO.

Also Read: How to Increase the Chances of IPO Allotment

Because of oversubscription of IPO, if you have been not allotted any shares, you receive your IPO application money back into your bank account or the fund will be unblocked in your bank account if you have applied through the ASBA process.

Fortunately, if you are lucky to get the allotment of shares of Credo Brands (Mufti Jeans)you will get the shares into your demat account before the listing day. If you are getting enough profit you can sell the shares in the secondary market or keep them for a long-term investment point of view.

Also Read: Why You Should Invest in the Stock Market: Reasons & Benefits

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