Campus Activewear Limited was incorporated in 2005. The company is engaged in the business sector of the Footwear Industry. It is one of India’s largest athleisure footwear and sports brands. The company is engaged in the manufacturing and distributing of a variety of footwear like Casual Shoes, Running Shoes, Walking Shoes, Floaters, Slippers, Flip Flops, and Sandals. The company produces all these products in multiple colors, designs, and styles at a variety of pricing. In this article, we take a closer look at the Campus Activewear IPO Review and its possible future prospects.
Campus Activewear has a presence in the market via its offline stores and online platforms. The company has a Pan -India presence with a wide distribution network of over 400 400 distributors spread over 28 states and covering 625 cities. Campus Activewear also has 18,200 retailers in its distribution network across India. The manufacturing of the footwear by the company has been carried out in their five manufacturing facilities. The annual combined capacity of this facility is 25.60 million pairs. The company also operates 57 COCOs and 28 franchisees under their business operation. As per their new expansion plan, the company plans to launch EBOs in the country. The company stated that for EBO, it intends to “preimmunize” products through its distribution and trade network.
OBJECTS OF THE IPO ISSUE:
- Prepayment of all the company’s loans, which be availed on a consolidated basis.
- To meet corporate targets.
CAMPUS ACTIVEWEAR IPO:
Campus Activewear Limited, a company with its headquarters in Mumbai, recently got approval from SEBI after it submitted its DRHP. The company is ready with its Purely OFS-based IPO Offer of 51,000,000. The company also stated that it would not carry out any pre – IPO allotment. The selling stakeholders offloading their stake in the company are as follows:
| Selling Shareholders | Total Shares | Offer Shares | Cost of Acquisition by the stakeholders | Selling Price | CAGR |
| TPG Investment | 52,307,692 | 29,100,000 | Rs. 54.67 | Rs. 292 | 40% |
| QRG Enterprise | 11,759,292 | 6,050,000 | Rs. 54.67 | Rs. 292 |
The company stated that the IPO issue offer constitutes around 15.76% of the post-issue fully paid-up equity capital. In the IPO offer, the company has reserved 200000 shares under the employee’s quota, where the employees will get a discount of around Rs. 27 per equity share. The company’s current paid-up equity capital base will be Rs. 152.16 crores as the IPO offer are a pure OFS-based offer. On the IPO offer valuations, the campus targets a market capitalization of Rs. 8886.32 crores. Check Day by Day IPO Subscription Details (Live Status)
| IPO Opening Date | April 26, 2022 |
| IPO Closing Date | April 28, 2022 |
| Issue Type | Book Building type Issue IPO |
| Face Value | Rs. 5 per equity share |
| IPO Price | Rs. 278 to Rs. 292 per equity share |
| Market Lot | One lot of 51 Equity Shares |
| Minimum Order Quantity | 1 lot corresponding to 51 Equity Shares of the company |
| Minimum Order Price | Rs. 14,892 |
| Maximum Order Quantity | 13 lots corresponding to 663 Equity shares of the company |
| Maximum Order Price | Rs. 193,596 |
| Listing At | BSE, NSE |
| Issue Size | 47,950,000 Equity Shares that aggregate to a sum of Rs. 1,400.14 Crores |
| Offer for Sale | 47,950,000 Equity Shares that aggregate to a sum of Rs. 1,400.14 Crores |
| Employee Discount | Rs 27 per equity share |
| QIB Shares Offered | 50% of the net offer |
| Retail Shares Offered | 35% of the net offer |
| NII (HNI) Shares Offered | 15% of the net offer |
| Basis of Allotment | May 4, 2022 |
| Initiation of Refunds | May 5, 2022 |
| Credit of Shares to Demat | May 6, 2022 |
| IPO Listing Date | May 9, 2022 |
STRENGTHS AND OPPORTUNITIES OF CAMPUS ACTIVEWEAR IPO:
- Campus Activewear as a company is the largest company in the country in the segment of sports and athleisure footwear. The company recorded the highest number both in terms of value and as well as in volume in the last financial year.
- Campus Activewear is the fastest-growing company engaged in the scaled sports and athleisure footwear segment. The company is growing at a CAGR of nearly 17%, much more than its competitors.
- The company has enjoyed a market share of 15% in the overall sports footwear segment, and in the affordable footwear segment, it has a huge dominance of around 32% of the market share.
- The campus has also benefitted from the new psychology of promoting Indian Brands as the company, from manufacturing to whole processing, is based in India.
- Shortly, the company has clarified its major shift towards a sustained focus on the upgradation of design and product innovation. It will help the company match the latest global trends and the fashion and style.
- Campus Activewear also holds strong support from the PE firms, which has helped the company during its initial period.
- The company has greatly benefitted from its robust supply chain, which takes over the difficulty of replicating the integrated manufacturing capacity of the company.
- The company has a Pan India presence and is a major company in the affordable footwear segment. Also, the company has come up strong product portfolio in the premium segment to increase its sales and enhance its market capitalization.
- Campus Activewear has also greatly benefitted from its strong brand recognition, innovative branding, and new marketing approach and techniques.
- The company has also been blessed with an excellent team guided by an experienced promoter base.
- Campus Activewear also maintained healthy margins in both top-line and bottom-line, even during the pandemic period.
WEAKNESS AND THREATS OF CAMPUS ACTIVEWEAR IPO:
- One of the major threats to the company is the failure to predict the market design successfully, pattern, and the latest trend. It could hamper their growth which can lead to a serious threat to their operating margins on both top-line and bottom-line.
- The company is engaged in a highly competitive market. It faces stiff competition from many organized players and unorganized players in different categories.
- The clients’ pricing, competition, and discounts on occasions may damage their gross Margin, along with the income, which is a negative flag for the company’s growth.
- Though the footwear segment is a whole year segment, it still has some seasonality impact on its sales and volume. The company needs to find a strategy to maintain constant sales.
- The COVID-19 badly hit the company though its margins were still better than other companies.
- Campus Activewear, in the past, has been linked with third-party transactions. The company stated in its DRHP that it might do the same again if required.
- The retention of the customer and the addition of the customer is another threat to the company. Another challenge is the retention of the management and other experts associated with
- Campus Activewear is also vulnerable to any misconduct of its growth-based strategy and cost-effective business operation.
- Campus Activewear relies heavily on its warehousing and shipping, forming part of its distribution network. Any disruptions associated with it can lead to a negative impact on the company’s business.
- Keeping a robust Inventory along with Inventory Management is also another issue for the company.
FINANCIAL TRENDS OF CAMPUS ACTIVEWEAR IPO:
| Earnings Per Share (Rs) | 1.77 | 4.06 | -56.37 |
| CEPS (Rs) | 1.96 | 2.81 | -30.27 |
| DPS (Rs) | 0.00 | 0.00 | 0.00 |
| Book NAV/Share (Rs) | 20.52 | 18.68 | 9.86 |
| Tax Rate (%) | 61.59 | 36.84 | 67.18 |
| Core EBITDA Margin (%) | 16.31 | 18.61 | -12.37 |
| EBIT Margin (%) | 12.25 | 15.74 | -22.22 |
| Pre – Tax Margin (%) | 9.83 | 13.49 | -27.11 |
| PAT Margin (%) | 3.78 | 8.52 | -55.67 |
| Cash Profit Margin (%) | 8.37 | 11.67 | -28.24 |
| ROA (%) | 3.92 | 10.87 | -63.92 |
| ROE (%) | 9.03 | 25.85 | -65.09 |
| ROCE (%) | 17.84 | 25.48 | -29.98 |
| Asset Turnover (x) | 1.04 | 1.28 | -18.60 |
| Sales/Fixed Asset (x) | 2.62 | 4.36 | -39.97 |
| Working Capital/Sales (x) | 5.99 | 7.65 | -21.70 |
| Fixed Capital/Sales (x) | 0.38 | 0.23 | 66.59 |
| Receivable days | 62.22 | 76.37 | -18.52 |
| Inventory Days | 95.55 | 71.82 | 33.05 |
| Payable days | 143.16 | 97.66 | 46.59 |
| EV/Net Sales (x) | 0.40 | 0.46 | -12.01 |
| EV/Core EBITDA (x) | 2.39 | 2.42 | -1.30 |
| EV/EBIT (x) | 3.29 | 2.91 | 13.13 |
| EV/CE (x) | 0.43 | 0.48 | -11.43 |
| Net Sales Growth (%) | -2.84 | 23.06 | -112.30 |
| Core EBITDA Growth (%) | -13.39 | 35.80 | -137.39 |
| EBIT Growth (%) | -24.43 | 31.73 | -176.98 |
| PAT Growth (%) | -56.93 | 61.58 | -192.45 |
| EPS Growth (%) | -56.37 | -99.90 | 43.57 |
| Total Debt/Equity (x) | 0.44 | 0.86 | -49.27 |
| Current Ratio (x) | 1.42 | 1.26 | 12.20 |
| Quick Ratio (x) | 0.71 | 0.80 | -11.32 |
| Interest Cover (x) | 5.08 | 6.98 | -27.30 |
| Particulars as in Crores | Dec 21 | Mar 21 | Mar 20 | Mar 19 |
| Sales | 841 | 711 | 732 | 595 |
| Cost of Material Consumed | 462 | 401 | 414 | 324 |
| Purchases of Stock in Trade | 13 | 4 | 0 | 10 |
| Change in Inventories | -59 | -30 | -34 | -13 |
| Employee Benefits Expense | 48 | 55 | 57 | 43 |
| Other Expenses | 215 | 166 | 159 | 131 |
| Operating Profit | 162 | 115 | 136 | 100 |
| OPM % | 19.26% | 16.17% | 18.58% | 16.81% |
| Other Income | 2 | 4 | 2 | 2 |
| Interest | 14 | 17 | 17 | 21 |
| Depreciation | 38 | 33 | 23 | 14 |
| Profit before tax | 114 | 70 | 99 | 66 |
| Total Tax Exps | -29 | -43 | -36 | -28 |
| Net Profit | 85 | 27 | 62 | 39 |
| NPM % | 10.11% | 3.80% | 8.47% | 6.55% |
| No. of shares | 30.43 | 30.43 | 30.43 | 30.43 |
| EPS | 2.82 | 0.88 | 2.05 | 1.28 |
| Particulars | For the year ending with the amount as in Rs. Crores | ||||
| 30 Sep 21 | 31 Mar 21 | 31 Mar 20 | 31 Mar 19 | ||
| Total Assets | 837.21 | 684.75 | 719.22 | 505.55 | |
| Total Revenue | 409.91 | 715.08 | 734.11 | 596.70 | |
| Profit After Tax | 30.09 | 26.86 | 62.37 | 38.60 |
PEER COMPETITION:
| Particulars | Bata India Ltd | Relaxo Footwear | Liberty | Mirza | Campus |
| Face Value | Rs. 5 | Rs. 1 | Rs. 10 | Rs. 2 | Rs. 5 |
| Total Income for FY21 (Cr) | 1802.57 | 2381.92 | 458 | 1048 | 715.1 |
| EPS (FY21) | -6.95 | 11.74 | 0.14 | 0.69 | 0.88 |
| NAV per share | 136.79 | 63.29 | 109.38 | 53.06 | 10.29 |
| Return on net worth | -5.08% | 18.54% | 0.13% | 1.30% | 8.60% |
| P/E | -202.33 | 74.65 | 908.21 | 66.01 | NA |
| P/B | 10.27 | 13.81 | 1.48 | 0.86 | NA |
| Market Price | 1913 | 1109.7 | 162.3 | 211.75 | NA |
Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
PROMOTERS OF CAMPUS ACTIVEWEAR IPO:
The promoters of the company are as follows:
- Hari Krishan Agarwal
- Nikhil Aggarwal
| Pre – Issue Share Holding | 78.21% |
| Post Issue Share Holding | 74.1% |
CONTACT DETAILS OF THE COMPANY:
Campus Activewear Limited
D-1, Udyog Nagar,
Main Rohtak Road,
New Delhi – 110041,
Delhi, India;
Tel: +91 11 4327 2500
E-mail: investors@campusshoes.com
Website: www.campusactivewear.com
REGISTRAR OF THE IPO:
Link Intime India Private Limited
C 101, 247 Park
L.B.S. Marg
Vikhroli (West), Mumbai 400 083
Maharashtra, India
Telephone: +91 22 4918 6200
E-mail: campus.ipo@linkintime.co.in
Website: www.linkintime.co.in
LEAD MANAGER(S):
- BofA Securities India Limited
- CLSA India Private Limited
- Kotak Mahindra Capital Company Limited
- JM Financial Limited
