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Sai Silks Kalamandir IPO Details: Launch Date, Share Price, Size, GMP & Review

Sai-Silks-Kalamandir-IPO

Sai Silks Kalamandir – About the Company

Sai Silks Kalamandir is a well-known retailer of ethnic wear mainly in sarees in the South Indian region. It offers various formats of ethnic wear into different market segments including premium, middle-class and budget range for different income group of people.

Its clothing range also includes ethnic wear for men, women and children with a diverse range effusion wear and western wear for all age groups of people. In the saree segment, it offers premium and ultra-premium sarees for parties, weddings and daily wear or special occasions with unique designs, colours and patterns promoting India's vibrant culture, traditions, and heritage of the different societies and communities of the country.

In the saree segment, it is offering well-known and reputable brands in the name of Kalamandir, Kancheepuram Varamahalakshmi Silks, Brand Mandir, and KLM Fashion Mall. It is mainly operating in South India and its stores are spread in the four South Indian states Andhra Pradesh, Tamil Nadu, Karnataka and Telangana.

As of January 2023, it has 53 stores spread over more than 6,00,000 square feet of retail space with employees of around 6,000 people in the company. Apart from physical retail stores, the company also sell its clothing range through e-commerce channels including its website and other popular online e-commerce marketplaces like Amazon & Flipkart etc.

Sai Silks Kalamandir IPO Objectives

The main motive of Sai Silks Kalamandir's IPO is to raise funds to meet the capital expenditure requirements for setting up the 25 new retail stores and brand promotions. The major portion of the fund will be used for the setting up of two warehouses and meeting the long-term working capital requirements of the company.

As half of the IPO fund around Rs. 600 crore consists the fresh issues, the fund will be also used to pay off the debt borrowed by the company. Some of the parts of the issue will be also used for general corporate purposes.

Sai Silks Kalamandir IPO Details:

IPO Open Date 20-Sep-23
IPO Close Date 22-Sep-23
Listing Date 4-Oct-23
Face Value Rs 2 per share
Price Rs 210 to Rs 222 per share
Lot Size 14 Shares
Issue Size 5,40,99,027 shares
(aggregating up to Rs 1201 Cr)
Offer For Sale 2,70,72,000 shares (aggregating up to Rs 601 Cr)
Fresh Issue  2,70,27,027 shares
(aggregating up to Rs 600 Cr)
Issue Type Book Built Issue IPO
Listing At BSE, NSE
QIB Shares Offered Not more than 50% of the Offer
NII (HNI) Shares Offered Not less than 15% of the Offer
Retail Shares Offered Not less than 35% of the Offer

 

Sai Silks Kalamandir IPO Issue Price & Size

The Sai Silks Kalamandir IPO is launched with a price range of Rs. 210 to 222per share and investors can bid between these price ranges. The total size of Sai Silks Kalamandir IPO is Rs. 1201 crore of which Rs. 600 crore will be a fresh issue and Rs. 601 crore will be offered for sale.

Sai Silks Kalamandir IPO Launch Date

Sai Silks Kalamandir IPO launch date is 20, Sep 2023means, the IPO will be open for bidding on 20th Sep 2023 and the closing date is 22 Sep 2023.

Sai Silks Kalamandir Financial Statements:

Particulars (Rs in Crore) FY23 FY22 FY21 FY20 CAGR
Revenue from Operations 1351.5 1129.32 677.25 1175.56 4.76%
Other Income 7.45 3.69 1.85 3.05
Operating Expenses 963.48 845.71 533.43 952.93  
Other expenses 175.47 150.56 81.46 118.92
EBITDA 212.5 136.74 64.21 106.76 25.79%
EBITDA margin% 15.72% 12.11% 9.48% 9.08%  
Depreciation 41.00 30.82 29.46 26.03
Interest 45.40 28.64 27.44 27.36
Profit / (loss) before tax 126.10 77.28 7.31 53.37  
Total Tax 35.98 19.60 2.18 11.28  
Profit After Tax 97.59 57.68 5.13 42.09 32.36%
PAT Margin% 7.22% 5.11% 0.76% 3.58%  

Source: DRHP&RHP

Sai Silks Kalamandir Financial Performance

The revenue of the company stood at Rs.1351.5 crore in FY23 which has shown a muted CAGR growth of 4.76% compared to FY20.In FY20 the revenue was Rs.1175.56 crore. However, the operating income of the company for the same period grew by 25.8% during the same period. And that is thanks to improved operating margins that were 9.08% in FY20 and now 15.72% in FY23.

The operating income of the Sai Silks Kalamandir was Rs. 212.5 crore, while it was Rs.106.76 crore. During FY20 owing to a pandemic, the revenue and net earnings of the company both were badly affected but since FY21 Company has gained momentum and now operating with better operating margins.

The net profit margins of the company also improved from 3.6% in FY20 to 7.2% in FY23 taking the PAT of the company at Rs 97.59 crore. However, the PAT in FY20 was merely Rs.42.09 crore. During the last three years, the finance cost and tax liability of the company also surged which is also reducing the bottom line of the company.

Sai Silks Kalamandir IPO Promoters & Shareholding of the Company

Nagakanaka Durga Prasad Chalavadi and Jhansi Rani Chalavadi are the main promoters of the company holding around 95.23% shares in the company.

However, post the Sai Silks Kalamandir IPO the holdings of all the promoters will be diluted and after the IPO the holdings will become around 60.80%.

Sai Silks Kalamandir IPO Shareholding Patterns:

S.No. Name of the Shareholder No. of Shares % of pre-Offer shareholding
1 Mr. Chalavadi Naga Kanaka Durga Prasad 66,72,600 33.00
2 Ms. Chalavadi Jhansi Rani 47,51,700 23.50
3 Ms. P. Dhanalakshmi 29,31,900 14.50
4 Ms. Chalavadi Devamani 22,24,200 11.00
5 Mr. Chalavadi D K Durga Rao 15,16,500 7.50
6 Mr. Annam Kalyana Srinivas 14,15,400 7.00
7 Mr. Annam Subash Chandra Mohan 4,04,400 2.00
8 Ms. Annam Suchitra 1,01,100 0.50
9 Ms. Annam Sowjanya 1,01,100 0.50
10 Mr. Annam Venkata Rajesh 1,01,100 0.50
  Total 2,02,20,000 100.00

Source: DRHP

Why Invest in Sai Silks Kalamandir IPO?

Investing in any new company could be a risky decision but there are various things that you can consider while investing in such companies including Sai Silks Kalamandir IPO. Apart from various other risk factors, companies operate in a highly competitive business environment, hence you should be aware of such risks. However, there are certain strengths of the company that can encourage you to invest in any new company including Sai Silks IPO.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

Strengths:

  • Sai Silks Kalamandir is one of the leading brands of ethnic wear in the South Indian market. It is a value-fashion retail company with a product portfolio for all age groups of people.
  • Apart from the ethnic segment, it has a diverse range in fusion wear and western wear for women, men, and children with dominancy in the saree market.
  • Sail Silks Kalamandir is operating with strong data-driven inventory management to manage the inventory of its wide range of products across retail stores.
  • Sail Silks Kalamandir Operates with a focused sales and marketing strategy along with a strong presence in the online and offline marketplace through the omnichannel network.
  • Moreover, the company is well-positioned in ethnic wear mainly in sarees and that is because of skilled and experienced manpower in sales and implementation of innovative marketing ideas.
  • The company has strong management backed with promoters and highly skilled in-house teams with proven execution capabilities making the company operate with high efficiency.
  • At the financial end company has shown strong growth, mainly in the last two years with improved margins in the net earnings of the company.

Risks:

  • The company is operating mainly in the south Indian region, hence there is limited scope for expansion in retail outlets in that particular region. When entering in a new market or other parts of the country there is already competition in the market.
  • The fluctuation in the demand from the customer end due to new trends in the market or uncertain unfavourable economic conditions can also affect the revenue and earnings of the company.
  • The major revenue of the company comes from women's wear, especially sarees and any kind of fluctuations in demand or change in the customer's preferences can also affect its revenue.
  • Apart from that, any changes in the regulatory framework could also adversely affect the operational activities and revenue growth of the company.
  • At the financial end, the company is highly susceptible towards uncertain economic conditions like the pandemic in 2019-20, in that year company incurred a huge decline in revenue.
  • As per the reports, the promoters of the company have collectively pledged around 31.33% of the fully diluted equity share capital to the State Bank of India.

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

Sai Silks Kalamandir IPO Grey Market Premium

The Grey Market Premium of Sai Silks Kalamandir is around Rs.10, which means the stock is likely to list at Rs.229 against the issue price of Rs. 222. The Grey Market Premium or GMP is the pre-listing market price of the stock, defined by the speculators in the market.

However, during the IPO bidding and till the date of the Sai Silks Kalamandir IPO listing as per the demand for shares in the market the GMP can fluctuate and go high. Nevertheless, GMP is not the right criteria to define the valuation of shares of any company.

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

Sai Silks Kalamandir IPO Review & Analysis

Sai Silks Kalamandir IPO is one the leading and well-known ethnic wear brands in the South Indian market. In ladies' traditional wear it offers a diverse collection of saares with a major contribution of revenue coming from this segment is an encouraging factor.

Further, with the utilization of funds raised through this IPO, the company is going to expand its retail outlets and promote the brands to acquire more customers is also going to increase the revenue and net earnings of the company.

At the financial end company has registered considerable growth in revenue as well as net profit. The operating and net margins of the company also improving making the Sai Silks Kalamandir IPO a good option for investment if available at a low price.

On the valuation front, taking the earnings per shares (EPS) of the company and considering the high band of the issue price, the stock of Sai Silks Kalamandirstood at a P/E of 35X which can be an attractive valuation if you compare it with the industry P/E of 98.03x.

However, many of the peer group companies are trading around the same P/E and some of them are above or below this. Hence, apple-to-apple peer comparison is not possible due to different products and business operations. But you can apply for the Sai Silks Kalamandir with the prospects of long-term investment to get good returns. However, if a stock is listed at a very high premium you can book profits or completely exit from the holdings in the stocks.

How to Apply for Sai Silks Kalamandir IPO?

To apply for the Sai Silks Kalamandir IPO you must have a demat account and to buy or sell the shares in the secondary market you need a trading account. If you have both accounts with Moneysukh, you can follow the steps given below. If you don't have these accounts, then first apply to open the trading and demat account with the required documents and then follow the steps given below to apply for the Sai Silks Kalamandir IPO.

Steps to Apply for Sai Silks Kalamandir IPO:

Step 1:Open trade.moneysukh.com in your browser and log in with your User ID & password.

Step 2:Now go into the IPO section and find the Sai Silks Kalamandir IPO.

Step 3: Now select Sai Silks Kalamandir IPO and click on the apply tab.

Step 4: Here you have to fill in the various details like price, quantity, and so on.

Note: In the retail segment while applying in any IPO, always bid at the cutoff price before submitting your application. 

Step 5:Now make the payment and submit your IPO application successfully.

How to Check Sai Silks Kalamandir's IPO Allotment Status?

Once the Sai Silks Kalamandir IPO bidding process ends, the allotment process will be started. The share allotment date of Sai Silks Kalamandir IPO is 27th Sep 2023. If you get the shares, they will be allocated into your demat account, while if you are unlucky and do not get any share in the allotment, then your money will be refunded into your bank account.

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

If the Sai Silks Kalamandir IPO is oversubscribed many times, then there is less chance of getting the shares in the IPO allotment. Depending on the allotment procedure the different categories of investors get the allocation of shares into their account. However, once the allotment is done, you can use various websites to check the Sai Silks IPO allotment. If you are not getting the allotment in retail category, and can afford to invest more than 2 lakhs you can try in HNI category.

Also Read: How to Apply for IPO in HNI Category: Benefits & Procedure

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