Vedant Fashion [Manyavar IPO] Review

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The ‘Manyavar’ brand of Vedant Fashions Limited is a leader in the Indian wedding and festivity clothing industry. The company has assembled a multi-channel organization and dispatched brands. The company’s focus is to share India’s rich culture, customs, and heritage through optimistic yet reasonable items across a wide value range. In this article, we take a closer look at the Vedant Fashions IPO Review and its possible future prospects. 

Using their excellent franchisee-owned exclusive brand stores, they try to give their buyers a distinguished yet smooth purchasing experience. It focuses on furnishing a one-stop objective with a wide range of product portfolios. They are centered around reinforcing their role in the Indian wedding and celebration wear market, premium men’s Indian wedding, and festivity wear market. The other brands of the company are Twamev and Manthan. The company is also engaged in the ladies’ Indian wedding and festivity wear market. They have owned the brand Mohey since 2015. It is a premium lady’s ethnic wear brand. They have a wide range of brand portfolios. It includes Manyavar, Mohey, Mebaz, Manthan, and Twamev. 

OBJECTS OF THE VEDANT FASHIONS IPO ISSUE:

  • Prepayment of all or significant part of the loan on the company on a consolidated basis.
  • To accomplish corporate targets

BASIS OF THE IPO OFFER:

The accompanying fundamental boundaries are used to find the IPO Offer Price.

  • With an expansive arrangement of brands serving the attraction of the entire family, the company is the business leader in the Indian festival wear industry. 
  • The Indian wedding and festivity clothing industry are enormous and rising, inferable from expanded spending on such clothing. 
  • Retailing abilities are joined with consumer-branded play in this separated business technique. 
  • They’re on the web, and physical outlets and channels are consistently incorporated into an omnichannel organization. 
  • Massive store network and replenishment of inventory frameworks based on innovation, driven by system-wide data analysis strategies.
  • Long Term vendor partnerships 
  • A Management team led by an experienced and highly knowledgeable promoter and promoter group.

VEDANT FASHIONS IPO DETAILS:

 Vedant Fashions Limited, headquartered in Kolkata, has submitted its DRHP to SEBI for approval of its IPO. The IPO size is 36,364,838 equity shares. The Vedant Fashion IPO offer doesn’t include any fresh equity shares; it only comprises an OFS, Offers for Sale of 36,364,838 equity shares. The OFS comprises sale of up to 1.74 crore shares by Rhine Holdings, up to 723,014 shares by Kedaara Capital Alternative Investment Fund – Kedaara Capital AIF 1, and up to 1.82 crore equity shares by the Ravi Modi Family Trust. Notably, marquee investors — Kedaara and Rhine — have decided to exit through the OFS. Check Day by Day IPO Subscription Details (Live Status)

IPO Opening DateFebruary 4, 2022
IPO Closing DateFebruary 8, 2022
Issue TypeBook Building Type
Listing AtBSE, NSE
Face ValueRs.1/ Equity Share
IPO Price 
IPO Size in equity Shares36,364,838 equity shares
Fresh Issue0 crores
Offer for Sale36,364,838 equity shares corresponding value
Min Order Quantity
Market Lot
IPO Closing DateFebruary 8, 2022
Basis of Allotment DateFebruary 11, 2022
Initiation of RefundsFebruary 14, 2022
Credit of Shares to Demat AccountFebruary 15, 2022
IPO Listing DateFebruary 16, 2022
Type% Of Allotment of the IPO Offer
Qualified Institutional Buyer50
Non-Institutional Investor15
Retail35
Total Allotment100

STRENGTHS AND GROWTH ASPECTS:

  • The company has a net retail footprint of 1.1 million square feet. It includes 525 EBOs in 207 regions and districts throughout the country. It also has 12 EBOs in the United States, Canada, and the United Arab Emirates. It signifies their strong Landbank also.
  • Their customers can place orders through their mobile application, website, and top e-commerce platforms such as Amazon, Flipkart, etc., in addition to their offline retail presence.
  • They use targeted marketing efforts. It uses digital and social media, television advertisements, billboards, multiplex theatres, and live events. It has helped them to establish a stronger connection with their customers.
  • The company has an established and strong brand identity.
  • Several industry accolades have recognized Vedant Fashions Limited. It includes The Global Award for Retail Excellence in 2020, India’s Retail Champions in 2020, and Best Men’s Ethnic Wear Brand in 2019.
  • They have a diversified product portfolio.
  • The company has a Robust financial risk profile and liquidity. 
  • Vedant Fashions Limited is the leading firm in India in the men’s Indian wedding and celebration wear category. They had the best operating margins and financial ratios in Sales, OPBDIT, and PAT in FY20 in the sector they are engaged in.
  • The firm is aiming to double its national footprint over the next financial years. It is also aiming for an increase in its production capacity to 1 Crore pieces every year.
  • Vedant Fashions Limited has a strong association with both Bollywood and Cricket. It is among the sponsors of Sunrisers Hyderabad, Kolkata Knight Riders, and Delhi Daredevils. The key brand Ambassadors are Amitabh Bachchan, Alia Bhatt, Ranveer Singh, Virat Kohli, and Anushka Sharma. 
  • Their product line comprises a wide selection of apparel and accessories. Along with clothing, they have also stepped in Jewellery Designs for their Ethnic wear. All of which are designed by their designers with experience in catering to the varied regional tastes of the Indian client.
  • The company has long-term contracts with suppliers and craftsmen.

WEAKNESS AND THREATS:

  • Any future pandemic or general wellbeing disaster, for example, the COVID-19 pandemic, may adversely affect their organization. 
  • Their business possibilities depend on the state of their signature brands, and any failure to keep up with or grow product portfolio may adversely affect their business operations. 
  • Their franchisee-owned EBO stores represent an enormous level of their clients’ deals. The major operation of their business comes from this only. The company needs to shift focus on expanding the business strength in their other stores also. 
  • Apart from the plan regarding designing of product, Vedant Fashions Limited outsources an enormous manufacturing operation to Third-party. It shows their vulnerability in terms of manufacturing strength.
  • Another reason to worry is that the outsourced manufacturing agreement has no mutually exclusive agreement or pact.
  • Any disappointment in their quality control techniques can affect their brand reputation. It can also adversely affect their business, financial margins, and operating margins.
  • The firm is mostly engaged in ethnic wear only. They are subject to the season of weddings, celebrations, and other ethnic occasions. 
  • The organizations’ revenue and cash flow might endure if they can’t effectively survey customer interest and keep a proper measure of stock in their shops. 
  • The level of shopper certainty and spending in India and the worldwide locales of their operation decides their development and productivity. 
  • Vedant Fashions Limited have limited option to extend their business into new geographic regions or unfamiliar business sectors. 
  • The organization, promoters, and some of the members in the management group are involved in ongoing legal procedures.
  • Susceptibility to intense competition: Changes in fashion trends and exposure to intense competition continue to constrain the business risk profile, limiting scalability. 
  • Large working capital requirement
  • The company needs to constantly innovate and adapt to changing client preferences while maintaining its brand identity and product quality.
  • In FY21, 44.22% of the company’s total sales came from their franchisee-owned exclusive brand outlets from Tier I cities. Also, another 42.05% from Tier 2 cities and 12.31% from Tier 3 cities. It signifies the strong undercurrent of the firm in developed and developing cities of India.
  • For FY21, the firm’s revenue from operations stood at Rs 564.82 crore against Rs 915.55 crore a year ago. Net profit for FY21 stood at Rs 132.9 crore versus Rs 236.63 crore in FY20. The decrease was significant due to the COVID-19 impact on the company.
  • Vedant Fashions Limited’s Manyavar brand is a market leader in the branded Indian wedding.
  • By 2025, the company plans to have 15,00,000 square feet of Manyavar retail space, 5,00,000 square feet retail space for Mohey. It also focuses on the project of 1000 exclusive stores, including 250 flagship & 50 global stores.
  • The Operating margins of the company were healthy. It is estimated at around 35% over the next years. 
  • The recovery in sales is expected to be gradual. It is due to the less demand for apparel products and the impact of the COVID-19 on consumers’ income and spending.
  • The company is expected to grow at a 14%-15% CAGR over Financial Years 2022 -2025.
  • Vedant Fashions Limited has a strong Liquidity backed by healthy accrual against nil maturing debt and absence of CAPEX.
  • The financial risk profile is supported by the strong net worth of the company. It is around Rs 975 crore as of March 31, 2020. 
Financial PeriodBasic EPS (in INR)Diluted EPS (in INR)
Financial Year 20215.365.36
Financial Year 20209.459.45
Financial Year 20197.047.04
 
ParticularsFor the year/period ended ( in Cr.)
30 June 202131-Mar-2131-Mar-2031-Mar-19
Total Assets1663.631625.651591.551,318.51
Total Revenue178.48625.02947.98819.80
Profit After Tax45.19132.90236.64176.43

PROMOTER:

Mr. Ravi Modi is the founder and Chairman& MD of the company. The other promoters are Shilpi Modi, Ravi Modi Family Trust, and Modi Fiduciary Services Private Limited. The Ravi Modi Family Trust currently holds 18.10 crore equity shares or a 74.67% stake in the company. Rhine Holdings holds 1.74 crore shares or a 7.2% stake, while Kedaara AIF holds 723,014 shares or a 0.30% stake.

CONTACT DETAILS:

Vedant Fashions Limited

Paridhan Garment Park, 19, Canal South Road,

SDF-1, 4th Floor, A501-502, Kolkata 700 015,

West Bengal, India;

Tel: +91 33 6125 5495

E-mail: complianceofficer@manyavar.com

Website: www.vedantfashions.com

REGISTRAR:

Kfin Technologies Private Limited

Selenium Tower B

Plot 31 & 32, Gachibowli

Financial District, Nanakramguda

Serilingampally, Hyderabad 500 032

Telangana, India

Telephone: +91 40 6716 2222

Email: manyavar.ipo@kfintech.com

Website: www.kfintech.com.com

LEAD MANAGER(S):

1. Axis Capital Limited

2. Edelweiss Financial Services Limited

3. IIFL Securities Limited

4. ICICI Securities Limited

5. Kotak Mahindra Capital Company Limited

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