Vedant Fashions shares made a modest listing on stock exchanges on 16 February 2022, as stocks opened 8.08% up at Rs 938 apiece from IPO price of Rs 866 apiece. At listing, the market capitalisation of the company stood at Rs 22,716.23 crore, according to BSE data. This is the third company to list on bourses in calendar year 2022, after the AGS Transact Technologies, and Adani Wilmar. The Rs 3,149 crore Vedant Fashions IPO was subscribed 2.57 times on the final day.

Vedant Fashions’ public issue was purely an offer-for-sale by the promoters and existing shareholders — by Rhine Holdings, Kedaara Capital Alternative Investment Fund; and the Ravi Modi Family Trust owned by Ravi and Shilpi Modi. While Manyavar is a category leader in the branded wedding and celebration wear market, its other brands include Twamev, Manthan, Mohey, and Mebaz and it competes with Aditya Birla Fashion Retail, Trent, Metro Brands and TCNS Clothing Company.

Also read: Vedant Fashions shares listing day strategy: Listing on Feb 16, check grey market premium; buy, sell, hold?

The company raised Rs 944.75 crore ahead of its proposed IPO at the upper price band of Rs 866 per equity share from anchor investors. Vedant Fashions has all-India multi-channel operations with 90% of sales to customers (FY21) through its exclusive-brand outlets (EBOs). “At Rs 866, the high of the issue price band, the stock is valued at 52x EV/EBITDA and 92x P/E on FY20 figures,” analysts at Anand Rathi Share and Stock Brokers said. They also added that the company’s category advantage, industry-leading margins and return-ratios are positives.

Incorporated in 2002, Vedant Fashions is the largest company in India in the men’s Indian wedding and celebration wear segment in terms of revenue, EBITDA and PAT for FY20. Vedant Fashions significantly expanded its footprint over the last five years with an overall EBO retail space in 212 cities in India and eight cities internationally, as on FY20. 

Analysts at ICICI Securities said that Vedant Fashions’ business model is driven by the strength of its system-driven technology infrastructure, its established systems, processes and longstanding relationships with vendors. The company operates a fully integrated supply chain with high-end quality control standards in the procurement of fabric, an essential component used for manufacturing its products. Manufacturing process includes the stages of cutting, embroidery, stitching and finishing.