Koutons Retail IPO is opening on September 18th IPO - price band at Rs 370-415
Koutons Retail IPO : Koutons Retail IPO is opening on September 18th 2007 [image: koutons.jpg] KRIL is entering the capital markets with an initial public offering, *IPO of 35,24,439 Equity Shares*, for cash, at a premium to be decided through a 100% Book Built Issue.The price band for the issue has been f*ixed at Rs. 370/- at lower level and Rs. 415/- at upper level* for equity
share of Rs. 10/-. The issue *opens on Sept 18, 2007, and closes for subscription on Sept 21, 2007*.
Koutons sets IPO price band at Rs 370-415
The offer opens on September 18 amd closes on September 21, the company said in a statement
Mumbai: Apparel maker Koutons Retail India Ltd said it had priced its initial public offer in the band of Rs370-415 a share.
The offer opens on September 18 amd closes on September 21, the company said in a statement.
The offer will constitute 11.54% of the post-issue capital.
Koutons plans to use the money to open retail outlets and set up a manufacturing unit.
JM Financial Consultants is the lead manager to the offer.
Koutons Retail IPO from Koutons Retail which is a leading garment manufacturing and exporting company is all set to tap the Indian capital markets. Koutons Retail has filed the draft red herring prospectus with SEBI and is waiting for SEBI’s approval. Koutons Retail was started by Mr. D.P.S Kohli & Mr. B.S.Sawhney in early 1991. Leading Indian private equity firm, UTI Ventures has invested in Koutons Retail and might exit or dilute its stake post IPO.
Koutons Retail India is planning to cross Rs1,000 crore turnover in next two years, following the rising domestic demand of garments in India. Last year, Koutons Retail’s turnover was Rs. 160 crore and this year it is expected to reach Rs. 400 crore. Koutons Retail is also planning to explore readymade women’s wear market. Koutons Retail has registered 130 percent growth and hence Rs. 1,000 crore target is not unachievable.
Passport India Investments (Mauritius) has picked up 6,00,000 equity shares in Koutons Retail India for an investment amount of Rs 210 million. Passport has been allotted the equity shares at a fixed price of Rs 350 per equity share.With this infusion Koutons Retail India has raised an aggregate amount of Rs 1,216 million as private equity since June, 2006. The earlier investors were UTI Venture Funds Management Company and Argonaut Ventures.
For Koutons Retail IPO Allotment status and IPO info come back here.
Following the rising domestic demand of garment, Koutons Retail India is planning to cross Rs1,000 crore turnover in next two years.
Last year, company’s turnover was Rs160 crore and this year it is expected to reach Rs400 crore.
Company is also planning to explore readymade women’s wear market.
As per the Compounded Annual Growth Rate (CAGR), company has registered 130 percent growth and hence, Rs1,000 crore target is not an illusion, informed H S Sidhu, Executive Vice President of Koutons Retail India.
Company has set the target to produce 1 crore pieces of garments from current 30 lakh pieces with an investment of Rs75 crore.
As of now company’s main focus will be to expand domestic presence and enter unexplored categories, Sidhu stated.
Koutons Retail India, the garment manufacturer, is aiming to be Rs 18 billion company by 2011-12, reports Business Standard.
The Gurgaon-based company is planning to open 1,000 retail stand alone stores for its Koutons brand by 2007-08 apart from re-launching its Charlie brand of denim wear this financial year.
The company will re-launch the Charlie brand, targeting the age group of 16-24 years, by opening 100 stores in a single day, and expects to close this financial year with 200 exclusive Charlie franchise stores.
At present, Koutons has 296 stores which it wants to ramp up to 450 stores by the end of this financial year, focusing mainly on spreading its wings in the western and southern parts of the country.
Koutons Retail India Chairman, D P S Kohli said that the company is comfortable in north India and has already made its presence in Tier-II cities. He however stated that the markets of south and west are virtually untapped and it is where the company eyes a big growth, after which it will focus on stepping out of the Indian shores to West Asia.
Koutons will launch at least 150 stores in the south and the company will invest Rs 550 million in the next two years to ramp up its back-end operations to cope with the fast paced expansion. It will fund this expansion through private equity, internal accruals and borrowing from the debt market.
Private equity firm UTI Ventures recently invested Rs 270 million in Koutons and the company had plans to go for a Rs 1400 million IPO. This plan, however, went into limbo after the volatility in the capital markets and will be revived once the stability returns, Kohli added.
Koutons Retail India Limited IPO : Koutons Retail India Limited, one of the largest Indian retailers of men’s apparels, is coming out with an IPO through the book building route. The Koutons Retail India Limited will open for subscription on September 18, 2007 and close for subscription on September 21, 2007. Koutons Retail India Limited is a private equity funded company. In July 2006, Koutons Retail India Limited had raised a private equity funding of Rs. 27 crores from UTI Ventures. Koutons Retail India Limited would use the funds from the IPO for expansion purposes. Post IPO, the shares of Koutons Retail India Limited will be listed on the stock exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The lead manager for Koutons Retail India Limited IPO is JM Morgan Stanley Private Limited. The registrar for the Koutons Retail India Limited IPO is Intime Spectrum Registry Ltd. For updates on the subscription / oversubscription ratio of Koutons Retail India Ltd IPO and to know the allotment status, refund details and listing date of Koutons Retail India Ltd. IPO, do check this blog regularly.
Koutons Retail India Limited IPO Prospectus
For more information, read the Draft red herring prospectus
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Koutons IPO oversubscribed 3.99 times
Koutons Retail India (KRIL), an integrated apparel maker and retailer, was oversubscribed 3.99 times for its public offer till September 20. KRIL received 14,060,790 share applications as against the issue size of 3,524,439 shares. A total of 1,059,870 bids were received at cut off price.
KRIL intends to garner maximum of Rs 1,082.27 million through fresh issue. It plans to offer shares of Rs 10 each at a price band of Rs 370 to Rs 415 a share. It invited investors to subscribe to its issue till September 21. To manage the public issue, KRIL appointed JM Financial Consultants. The net issue will constitute 11.37% of post-issue capital of the company.
KRIL intends to finance expansion plans worth Rs 869.75 million via proceeds of the fresh issue. Its expansion plans include setting up of exclusive brand outlets, establishment of a new integrated manufacturing facility, purchase of plant and machinery to increase capacity and improvement of information technology network.
KRIL is an integrated apparel manufacturing and retail company, engaged in the business of designing, manufacturing and retailing apparel under the `Koutons` and `Charlie Outlaw` brands, through a network of 999 exclusive brand outlets across India. It has 18 in-house manufacturing and finishing units and 14 warehouses which are spread across various locations in and around Gurgaon, Haryana. It holds the capacity to manufacture 12.36 million and finish 22.92 million pieces of apparel annually.
Listing Date , Allotment Status , IPO Grey Market Premium.
Page 1* *(In %)* *Pre-Issue * *Post-Issue * 76.13 66.63 23.29 21.32 0.58 0.52 - 0.16 - 11.37 100.00 100.00 27,943,500 30,551,397 *KRIL* *Industry Avg.* 4,023.97 51,377.80 702.65 4,430.80 *FY 2007* *FY 2006* *FY 2005 FY 2004* 61.38 14.60 Sales 4,023.97 1,583.44 579.45 310.67 17.46 8.62 Total Income 4,036.17 1,583.85 581.46 317.53 8.57 6.74 Optg Profit 702.65 255.75 48.25 22.30 32.78 & 36.76 13.04 Net Profit 344.87 131.98 19.29 8.82 20.12 & 22.57 EPS* 11.29 4.32 0.63 0.29 Share capital 273.44 49.90 48.44 13.44 Res&Surplus 288.40 150.77 18.55 28.82 Networth 561.84 200.67 66.99 42.26 Total Debt 2,094.30 512.58 174.81 116.47 Book Value* 18.39 6.57 2.19 1.38 *(KRIL)* *IPO - ANALYSIS* Total Equity Share in Issue Employee Reservation Portion QIB 2.08 Promoters & PAC *Koutons Retail India Limited* Of Which Reserved for:- *Price Band* *SUBSCRIBE * *Sector : Textiles Readymade Apparel * Corporate Bodies *Equity Research Desk* *Issue Summary* *September 11, 2007* www.koutons.com Price to Book Value (370 & 415) *(Rs. In Million)* 0.35 Total Operating Profit (Rs. in million) *Multiple* *Financial Snapshot* 27.94 1.04 Others Employees Sales (Rs. in million) 30.55 *Equity Share Outstanding * Prior to the issue After the issue Retail Public Total no. of shares Non - Institutional *Issue Open: September 18,2007* *Company Valuation* *The no. of shares are of the post issue equity i.e. 30.55 mn shares. *Company Snapshot* *Rs. 370 - Rs. 415* *Issue Close: September 21,2007* Net Issue To The Public 3.52 *Shareholding Pattern* 0.05 *(Shares in million)* 3.47 RONW (%) OPM (%) NPM (%) P/E (370 & 415) *Industry Scenario* *Objects of the issue: * 1. Setting up of exclusive brand outlets of KRIL. 2. Establishment of a new integrated manufacturing facility. 3. Purchase of plant & machinery. 4. Improvement of the information technology network. 5. General corporate purposes. - KRIL has shown a CAGR of 135% in topline, 216% in EBITDA & 239% in bottomline in the last three years. - Strengths are: Exclusive brand outlets; Wide netowrk of exclusive brand outlets; Low-cost sourcing abilities; Design & merchandising expertise; Wide apparel range; IT Infrastructure; Robust growth in terms of regions covered; The brand name Koutons & Charlie Outlaw. - Weakness are: High dependency on franchisee for sales of the products; Caters only to men’s category; Outsource manufacturing of some products; Manufacturing facilities are set up only in North India. - Opportunities are: The growing retail market in India; KRIL is planning to foray into garments for kids & ladies; Expanding into new geographies; - Threats are: Seasonality of the business; Exchange rate fluctuations; Stiff competition faced in this sector with large number of players in the unorganized sector. - Strategies are: Enhance manufacturing capacity; Increase geographic penentration; Target the growing segment; Strengthen the competitive position & recognition of the brands; Exports of apparel under the brand names. - The stock is available at a *P/E of 33x & 37x at the* *lower & upper band of the issue price respectively. * - India tops the annual list of most attractive countries for international retail expansion. - Retailing in India is currently estimated to be a USD 270 bn industry. - Growth drivers of the industry are: Changing demographic profile; Rising income level; Consumer spending habit; Urbanization; Retail space; Mall culture; Retail formats preferred in India. - Indian apparel market trends: i) Malls are expected to be one of the main growth drivers of apparel retailing in India, as such organized retail spaces offer large areas to fashion products; ii) Existing apparel brands & retailers have started exploring the potential of the smaller cities & expanding their retail network. There has been 145% growth on an average in retail presence in 2006 from 30% in 2005; iii) In terms of opening new retail outlets, apparel retailers & brands attained 84% growth in opening up of number of outlets in 2005 to 113% in 2006. - Globally private labels contribute to 17% of retail sales & are growing at 5% pa. Private labels provide higher margin to the retailers simultaneously offering lower price to the consumers. This is a strategy adopted globally & now is extensively used by Indian retailers. Koutons_Retail_India_Limited_11_September_2007.pdf
Koutons Retail India Limited IPO listing info:
IPO Listing Date: Friday, October 12, 2007
BSE Script Code: 532901
NSE Symbol: KOUTONS
Listing in: B1 Group of Securities
ISIN: INE406I01014
Issue Price: Rs. 415/- Per Equity Share
Face Value: Rs. 10/- Per Equity Share
The Grey market premium for koutons is near Rs100, and if the market momemtum sustains till friday so could see even much higher listing price.
Good Luck!