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Vedant Fashions fixes IPO price band at Rs 824-866, looks to raise Rs 3,149 crore

The anchor book will be announced on February 3, and the company is likely to list on the exchanges on February 16.

As the selling shareholders will be entitled to the entire proceeds after deducting the offer expenses and relevant taxes thereon, Vedant Fashions will not receive any proceeds from the IPO.
As the selling shareholders will be entitled to the entire proceeds after deducting the offer expenses and relevant taxes thereon, Vedant Fashions will not receive any proceeds from the IPO.

Vedant Fashions, the owner of the ethnic and celebration wear brands, Manyavar, Mohey and Manthan, will launch its initial public offering (IPO) on February 4, the company said on Friday. It has set the price band for the IPO at Rs 824-866 per share. At the upper end of the band, the company expects to raise Rs 3,149 crore. The anchor book will be announced on February 3, and the company is likely to list on the exchanges on February 16.

The IPO, purely an offer for sale of up to 3.64 crore equity shares by promoters and existing shareholders, will conclude on February 8. Bids can be made for a minimum of 17 equity shares and in multiples of 17 equity shares thereafter.

As the selling shareholders will be entitled to the entire proceeds after deducting the offer expenses and relevant taxes thereon, Vedant Fashions will not receive any proceeds from the IPO.

Axis Capital, Edelweiss Financial Services, ICICI Securities, IIFL Securities and Kotak Mahindra Capital are the book running lead managers of the issue.

The offer consists of 36,364,838 equity shares of face value of `1 each, comprising up to 17,459,392 shares by Rhine Holdings, up to 723,014 shares by Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF 1 and up to 18,182,432 shares by the Ravi Modi Family Trust.

The promoters of Vedant Fashions are Ravi Modi, Shilpi Modi and Ravi Modi Family Trust acting through its trustee, Modi Fiduciary Services. Ravi Modi is the founder, chairman and managing director of the company.

Based on the FY21 earnings, the price-to-earnings (P/E) multiple works out to be 161.57x, which seems expensive, according to experts.

Notably, not more than 50% of the offer will be available for allocation on a proportionate basis to qualified institutional buyers. Further, not less than 15% of the offer will be available for allocation on a proportionate basis to non-institutional investors and not less than 35% of the offer will be available for allocation to retail individual investors.

In the red herring prospectus, the company said, “We are now focused on further enhancing our leadership position and establishing our dominance in the premium and value segments of the men’s Indian wedding and celebration wear market through our brands, Twamev and Manthan. Parallelly, we are also focused on expanding our presence in the women’s Indian wedding and celebration wear market through our brand, Mohey.”

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