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Khadim IPO opens; 6 key points to know about Rs 543 crore issue before you go for subscription

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Updated: November 2, 2017 10:10:29 AM

The IPO of the Kolkata-based footwear retailer Khadim’s India opened on Thursday for bidding. Khadim’s India has expected to raise about Rs 543.06 crore at the upper end of the price band.

Khadim’s India reported a rise of 21.83% in the restated net profit to Rs 30.75 crore for the financial year ended 31 March 2017. (Image: Website)

The IPO (initial public offering) of the Kolkata-based footwear retailer Khadim’s India opened on Thursday, 2 November for bidding. Khadim’s India has expected to raise about Rs 543.06 crore at the upper end of the price band, PTI reported. The share sale will remain open for three days bidding process starting 2 November to 6 November. There are three Listed companies in footwear retail namely Bata, Relaxo and Liberty. Compared to Bata, the largest retailer with 1,900 stores, Khadim’s store count is almost half, out of which about 190 are company-owned stores. Although Khadim’s has a pan-India presence, the footwear retailer has most of its outlets in the Eastern part of India. We take a look at six key points about Rs 543 crore public offer.

IPO details

The public issue of Khadim’s India comprises a fresh issue of equity shares totalling up to Rs 50 crore and an offer for sale of up to 65.74 lakh equity shares. The company has set a price band of Rs 745-750 per equity share of a face value Rs 10 each which implies that floor price is 74.5 times and cap price is 75 times of the face value. The company’s promoter Siddhartha Roy Burman would sell 7.22 lakh equity shares, while Fairwinds Trustees Services Pvt Ltd would offer 58.52 lakh shares, PTI reported. Axis Capital and IDFC Bank are the book running lead managers while Link Intime is the registrar to the issue. Bids can be made for a minimum of 20 equity shares and in multiples of 20 shares thereafter.

Anchor investors

Khadim’s India raised Rs 163 crore from anchor investors yesterday after the company’s IPO committee finalised allocation of 21.72 lakh shares to more than 10 anchor investors at a price of Rs 750 per equity share. Franklin India, UTI Mutual Fund, HSBC Global Investment Fund and IDFC Mutual Fund are among the anchor investors, according to a regulatory filing.

IPO proceeds

The selling shareholders will be entitled to the proceeds of the offer for sale of their respective portion of the equity shares after deducting their portion of the offer related expenses and relevant taxes thereon. The company will not receive any proceeds from the offer for sale. The net proceeds from the fresh issue are proposed to be utilised towards prepayment or scheduled repayment of all or a portion of term loans and working capital facilities availed by the company and for other general corporate purposes.

Company profile

Khadim’s is a footwear retailer brand in India. According to Technopak Report, Khadim’s is the second-largest footwear retailer in India in terms of the number of exclusive retail stores operating under the ‘Khadim’s’ brand, with the largest presence in East India and one of the top three players in South India, in fiscal 2016.

Business profile

Khadim’s was established in 1965 in Chitpur by Lt. Sri Satya Prasad Roy Burman. In 1993 Khadim’s forayed into retailing and as on 30 June 2017, it has 853 retail store outlets in across 23 states and one union territory in India. In 2013, Fairwinds had invested Rs 90 crore for a 34% stake in the company while the remaining 66% stake is held by the promoters.

Financials

Khadim’s India reported a rise of 21.83% in the restated net profit to Rs 30.75 crore for the financial year ended 31 March 2017. The company has posted a profit of Rs 25.24 crore in the previous fiscal. The total revenue of company grew by 16.09% to Rs 625.54 crore for the corresponding period.

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