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  • Writer's pictureJatin Agarwal

Sai Silks IPO


sai silk logo

Company and IPO Overview:


Sai Silks (Kalamandir) commenced its operations in 2005. It is amongst the top 10 retailers of ethnic apparel, particularly sarees, in south India in terms of revenues and profit after tax in Fiscal 2021, 2022 and 2023. Sai Silks (Kalamandir) offers various types of ultra-premium and premium sarees suitable for weddings, party wear, occasional and daily wear, lehengas, men’s ethnic wear, children’s ethnic wear and value fashion products comprising fusion wear and western wear for women, men, and children.


Sai Silks has four different format stores:

1. Kalamandir: Here it offers contemporary ethnic fashion for the middle income, this includes varieties of sarees, such as Tusser, Silk, Kota, Kora, Khadi, Georgette, Cotton, and Matka.

2. VaraMahalakshmi Silks: Here it offers premium ethnic silk sarees and handlooms targeting wedding and occasional wear, such as Banarasi, Patola, Kota, Kanchipuram, Paithani, and Organza, Kuppadam, with a focus on handlooms such as Kacheepuram silk sarees.

3. Mandir: Here it offers ultra-premium designer sarees targeting high net worth individuals, such as designer sarees such as Banarasi, Patola, Ikat, Kanchipuram, Paithani, Organza, and Kuppadam.

4. KLM Fashion Mall: Here it offers value fashion at affordable price points, such as fusion wear, sarees for daily wear, and western wear for women, men, and children.


Sai Silks IPO is the next main board IPO which is ready to go public, the company is about to raise around ₹ 1201 crores via IPO comprising Fresh Issue of ₹ 601 crores and Offer For Sale upto ₹ 600 crores. The price band of the issue is ₹ 210 to ₹ 222 with a minimum market lot of 67 shares. Sai Silks (Kalamandir) IPO subscription quota for retail is 35.00%, NII is 15.00% and QIB is 50.00%.


Financials (rounded off):

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2021

679

5

31/03/2022

1133

58

31/03/2023

1359

98


Objectives of the Issue:

1. Funding capital expenditure towards setting up 30 new stores.

2. Funding capital expenditure towards setting-up of two warehouses.

3. Funding working capital requirements of the Company.

4. Repayment or prepayment, in full or part, of certain borrowings availed by the Company.


IPO Details:

IPO Date

20/09/2023-22/09/2023

Face Value

₹2 per share

IPO Price Band

₹210-₹222 per share

IPO Lot Size

67 Shares

Listing at

NSE, BSE

Basis of Allotment

27/09/2023

Credit of Shares in Demat

03/10/2023

Listing Date

04/10/2023

Pre-Issue Shareholding

95.23%

Post-Issue Shareholding

60.80%

Retail Minimum Lot Size

67 shares (₹14,874)


Valuations & Margins:

Indicators

FY 21

FY 22

FY 23

EPS

0.43

4.79

8.11

P/E

-

-

27.37

EBITDA (%)

9.21

11.78

9.21

ROE (%)

8.51

21.71

23.55


Important things to note about the Company:


Top reasons to consider the IPO:


1. Sai Silks (Kalamandir) has a strong presence and brand value in the offline and online marketplace with an omnichannel network especially in southern states of India.


2. Sai Silks (Kalamandir) operates through 4 store formats Kalamandir, VaraMahalakshmi Silks, Mandir and KLM Fashion Mall thereby attracting and serving selected customers as per their preference in each store.


3. Sai Silks has a diversified range of product offerings thereby catering to different preferences of customers.


4. Sai Silks recorded massive growth in revenue and profits post Covid with an improved margin.


Risk Factors to watch out in the IPO:


1. The business of Sai Silks is highly concentrated on the sale of women’s sarees and is vulnerable to variations in demand and changes in consumer preference, which can have an adverse effect on the business.


2. The business is mostly located in south India and any adverse effects in these regions may affect its business and profitability.


3. The business segment in which the company operates has fewer barriers to entry and exit of players, thereby increasing the competition for the company.



Crisp Insights:

  • Sai Silks IPO GMP Today: The Company is commanding a GMP of Rs.15.

  • Sai Silk GMP is weak and hence, investors need to be careful.

  • Sai Silks IPO Review: Following an unsuccessful attempt at its inaugural IPO back in February 2013, this company has risen to become one of the top 10 retailers in the ethnic wares market, with a strong emphasis on sarees. Its prospects for future growth appear promising, contingent upon its expansion into diverse geographical locations beyond South India and its ability to sustain customer loyalty. However, judging by its FY23 earnings, the offering seems to be fairly valued. Savvy investors with some understanding of the market may consider investing for potential medium to long-term gains.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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