Manyavar-owner Vedant Fashions has filed a draft red herring prospectus with the capital market regulator SEBI to launch an IPO. Vedant Fashions has three distinctive brands in the men’s ethnic and celebration wear market, Manyavar, Twamev and Manthan, a women’s ethnic and celebration wear brand, Mohey, as well as a regional heritage brand, Mebaz. The public issue will be an offer for sale by existing shareholders and won’t consist of a fresh issue of equity share. The total offer for sale (OFS) of 3.63 crore shares will include 1.74 crore shares by Rhine holdings Ltd, up to 7.23 lakh by Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF 1 and up to 1.81 crore equity shares by Ravi Modi Family Trust.
Axis Capital, Edelweiss Securities, ICICI Securities, IIFL Securities and Kotak Mahindra Capital are the investment bankers to the issue. KFin Technologies Private Ltd will be the registrar to the issue. There are no listed companies in India that engage in a business similar to that of Manyavar-owner Vedant Fashions. The company will not receive any proceeds from the offer. The selling shareholders will be entitled to the entire proceeds of the offer after deducting the offer expenses and relevant taxes thereon. The promoters of the company are Ravi Modi, Shilpi Modi and Ravi Modi Family Trust.
Vedant Fashions, in its DRHP, said that any equity shares allotted to anchor investors in the anchor investor portion shall be locked in for a period of 30 days from the date of allotment. The company said that the long-term growth in the domestic market will be driven by rising working population and income levels, higher penetration of organized retail stores and e-commerce, and growing preference for RMG over tailor-made garments. The share of men’s wear, which accounted for approximately 42% in FY20, is estimated to have increased to approximately 43% in FY21, as women and kids were confined mostly to homes, leading to a fall in the contribution of women’s wear in FY21.
Apparel retailing of men’s wear has developed at a reasonable pace over the years, with early entrants such as Raymond, Arvind Brands, Zodiac, Manyavar. The ethnic apparel retail market grew at approximately 9 per cent CAGR over FY15- FY19 in line with the overall apparel retail market in the past. The large wedding market and festivals throughout the year are strong fundamental drivers of the organized ethnic wear market in India for the long term. With long-term growth factors remaining intact and celebrations continuing to drive ethnic-wear sales, the concept of pent-up demand is very relevant in Indian wedding and celebration wear, unlike other consumer categories, therefore driving growth higher.