Credo Brands Marketing IPO Review: Credo Brand Marketing Limited is an Indian Manufacturer of  Western casual wear. The Company is coming up with an IPO which opens on 19th December and close on 21st December 2023. The Rs. 550 Cr issue will be listed on 27 December 2023. 

Let us learn a bit more about the Company and learn about its market presence. Then we shall do an overview of the industry and see if there this room for the Company to scale. Finally, we will look into the Company’s financials and pick out its strengths and weaknesses, just before concluding.

Credo Brands Marketing IPO Review – About the Company

Credo Brands Marketing is the parent Company of the brand Mufti, a brand that is set to redefine Menswear in the casual category. The Brand had its humble beginnings way back in 1992, when promoter Kamal Khushlani, took a Rs. 10,000 loan to set up his fashion retail brand.

The brand went from a single store in Mumbai to having a presence in over 591 cities. The Company now has a Pan-India network of distribution comprising Exclusive Brand Outlets (EBOs), Large Format Stores (LFS), and Multi-Brand Outlets (MBOs), along with an online presence.

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The Brand provides a range of Men’s western wear such as Sweatshirts, Jeans, Cargo, Chinos, Jackets, Blazers, and sweaters. The brand designs outfits for relaxed holiday casuals, authentic daily casuals, urban casuals, party wear & athleisure.

The Company earns a majority of its revenue from its Exclusive Brand Outlets, contributing to anywhere between 52%-61% of revenue. Multi-brand outlets bring as much as 27%-30% of revenue, MBOs did see a drop to just 17.89% of revenue in Q1FY23. Mufti’s presence in the Large Format Stores garners the least revenue at just  3.16% in FY23.

Credo Brand Marketing - About the Company
Source: RHP of the Company

Credo Brands Marketing IPO Review – About The Industry

The retail market in India was valued at Rs. 36 Lakh Cr (USD 461 Bn) in FY15 and reached a value of Rs. 76 Lakh Cr (USD 951 Bn) in FY23. The market is projected to grow at a CAGR of 10.4% to reach Rs. 113 Lakh Cr (USD 1,418 Bn) by FY 2027.

This retail market includes everything from Apparel & accessories to Consumer Electronics, watches & jewellery. Off the total retail market, the share of the apparel and accessories market is only 7%, which is expected to increase to 9.5% by FY27.

The Men’s Apparel market was expected at 2.2 Lakh Cr in FY23, growing at the rate of 9.6% CAGR from FY15-20. The Market is expecting to achieve a strong growth of the rate 18% CAGR to reach Rs. 4.3 Cr by FY27.

In the Men’s Apparel category, the market share of organized players stood at ~45% in FY22, as per a Technopark Report. This share is expected to increase to ~60% by FY27. The Men’s Western Market contributes to ~94% of the Total Men’s Apparel and the remaining by Western wear.

The young demographic of India and the casualization of fashion in Men’s Wear, like corporates introducing the concept of Casual Fridays, are expected to grow the Menswear market in the coming years. Increasing demand for fusion wear, a blend of Western wear with Indian styles is set to be a trendsetter for the decade.

The Brand Mufti stands on the cusp of the premium & mid-premium segment. Let us look at how the Mufti fares against its peer brands. 

Credo Brand Marketing Products

Credo Brands Marketing IPO Review – Financials

Credo Brand reported a Revenue of Rs. 509 Cr in FY23, which increased by 43% from Rs. 355 Cr in FY22. Since FY21, the Company has increased its revenue by 40% CAGR.

During the same period, the Company’s Net Profits skyrocketed by 117%, increasing from Rs. 36 Cr in FY22 to Rs. 78 Cr in FY23. Since FY21, Net Profits have increased at the rate of 375% CAGR.

The Company has maintained industry-leading EBITDA & PAT Margins of 32.89% & 15.56% respectively. The significant rise in Net Profits comes on the back of the expansion of Margins, from 1.41% in FY21 to 15.56% in FY23.

Credo Brand Marketing – Key Players 

When compared against listed companies, Credo stands as the smallest Company in terms of revenue. The Company is just 4% of the retail giant Aditya Birla Fashion Ltd. 

Credo’s closest competitor happens to be Go Fashion (India), a premier Women’s Leggings manufacturer selling under the brand Go Colours. Credo’s revenue is 75% of that of Go Fashions.

Go Fashions currently commands a PE of 88.24x on the exchange, while Credo is listing at a PE of just 23x. Another point to note is that Credo Brands currently has much better ROE & ROCE as compared to Go Fashion (India).

Source: RHP of the Company

Strengths of the Company

  1. The Company outsources its entire production and produces on a large scale. This eliminates the high labor costs. The brand’s outlets are signed on a 5-9-year lease, thereby the Company maintains an asset-light model.
  2. Credo houses a team of professional designs with rich experience having worked in both global as well as domestic retail markets. This exclusive team of 17 members curated over 682 designs as of H1FY24.
  3. The Company has a presence of 404 EBOs across the country, of which 66% are on the high street, 32% in malls & 1.5% in airports. These stores bring the majority of the revenue for the Company.
  4. The Company enjoys industry-leading EBITDA & PAT Margins of 30% & 15%. 
  5. Since FY21, Credo has been successful in increasing its ROE & ROCE from 5.86% & 1.81% to 28.16% & 29.98% in FY23 respectively. This shows signs of effective financial management.

Weaknesses of the Company

  1. The Company operates in a highly competitive market with a host of International brands. Keeping up with the market trends or hunting for their market share would be the biggest challenge for the Company.
  2. The Brand is specifically focused on Men’s Casual Wear. Any abrupt change in Men’s consumer preference can significantly impact the brand. Hence, diversification is necessary.
  3. The Company earns its entire revenue from selling products under just one brand, Mufti. Again, some diversification would reduce the exposure of the brand to just one segment.
  4. Just like any Organised retail business, the Company is at risk of having unsold Inventory. Its current Inventory Turnover days have increased from 154 in FY23 to 198 as of Q1FY24.

Credo Brands Marketing IPO Review – GMP

The shares of Credo Brand Marketing Ltd traded at a 44.64% premium in the grey market on December 18th, 2023. The shares in Grey Market traded at Rs 405. This gives it a premium of Rs 125 per share over the cap price of Rs 280.

Key IPO Information

IPO SizeRs. 549.78 Cr
Fresh Issue-
Offer for Sale (OFS) Rs. 549.78 Cr
Opening date19 December 2023
Closing date21 December 2023
Face ValueRs. 2
Price BandRs. 266 - 280
Lot Size53 Shares
Minimum Lot Size1 Lot (53 Shares)
Maximum Lot Size13 Lots (689 Shares)
Min. InvestmentRs. 14840
Listing Date27 December 2023

Promoters: Kamal Khushlani

Book Running Lead Manager: DAM Capital Advisors Ltd, ICICI Securities Ltd and Keynote Financial Services Ltd

Registrar to the Offer: Link Intime India Pvt Ltd

The Objective of the Issue

  1. To provide a profitable exit to the promoters of the Company.
  2. To achieve the benefits of listing on the Exchange.


This brings us to a conclusion on the Credo Brands IPO. The Company is issuing shares only when it has been successful in expanding its market presence and maximizing its profits. Additionally, at its issue price of Rs. 280, the Company is valued at a PE of 23x, which seems reasonably priced, especially considering the rate of its earnings growth. 

Credo’s Peer, Go Fashion (India), was listed two years ago on 3rd December 2021. The IPO was listed at a bumper premium of 80%. However, since that listing the IPO has been a disappointment to new shareholders, returning negligible gain (~4%) since listing. Nevertheless, Go Fashion listed itself as a Loss maker & only turned a profit in FY22.

So how will Credo Brands fare in its IPO listing? Is the stock attractive enough to add to your portfolio? Let us know in the comments below.

Written by Nasir Hussain

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