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Vedant Fashions Ltd. Initial Public Offer (IPO) will open for subscription on February 4, 2022, and close on February 8, 2022. The company is looking to raise Rs 3,149.19 Crores through the IPO. In this article, we take a closer look at the Vedant Fashions IPO Review and its possible future prospects. Keep Reading to find out!

About the Company

The largest company in India in the men’s Indian wedding and celebration wear segment in terms of revenue, OPBDIT, and profit after tax for the Financial Year 2020. Their product portfolio also includes a diverse range of attires and accessories. 

The company operates through franchise-owned exclusive brand outlets (“EBOs”), multi-brand outlets (“MBOs”), large format stores (“LFSs”), and online platforms, including their website (www.manyavar.com) and mobile application.

As of June 30, 2021, they had a retail footprint of 1.1 million square feet covering 525 EBOs (including 55 shop-in-shops) spanning 207 cities and towns in India, and 12 EBOs overseas across the United States, Canada, and the UAE, which are countries with a large Indian diaspora. The segment wise products of Vendat are:

Men’s Indian wedding and celebration wear market

They have three distinctive brands in the men’s Indian wedding and celebration wear market. They are:

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  • Manyavar: Manyavar is their flagship brand. It is in the mid-premium Indian wedding and celebration wear category of the company.
  • Twamev: It is their premium brand in men’s Indian wedding and celebration wear market
  • Manthan: It is their value brand offering men’s Indian wedding and celebration wear. It caters to the demands of the sizable number of mid-market weddings and other celebrations.

Women’s Indian wedding and celebration wear market

  • Mohey: They launched their mid-premium brand in 2015 to establish a presence in the women’s wedding and celebrations market.

Regional Indian weddings and celebrations wear

  • Mebaz: Vedant acquired Mebaaz, a one-stop-shop heritage brand that has a strong legacy in 2018. It has a strong presence in Andhra Pradesh and Telangana.

The major competitors in Branded wedding wear

Raymond, Nalli’s, Jahanpanah, Ritu Kumar, Neeru’s, and Sabyasachi.

Financial Snapshot of Vedant Fashions Limited

(Source: DRHP of Vendant Fashions Limited)

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Industry Overview

The Indian wedding and celebration wear apparel market is expected to grow at a 15% to 17% CAGR over the Financial Year 2022 to 2025 period and reach  ₹ 1,375 billion by FY2025.

It will be led by the fundamental nature of the industry, higher spending per consumer, and the increasing trend of multi-day wedding functions in India.

According to CRISIL, the men’s Indian wedding and celebration wear market was estimated to be worth approximately ₹ 133 billion as of FY20 and is projected to increase to ₹ 180 billion by 2025.

Likewise, the women’s Indian wedding and celebration wear market is significantly larger, estimated to be worth approximately ₹ 735 billion as of FY 2020, and is projected to increase to ₹ 1,000 billion by 2025.

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Strengths of the company

  • Market leader in the Indian celebration wear market with a diverse portfolio of brands catering to the aspirations of the entire family.
  • The large and growing Indian wedding and celebration wear market has driven the sales of the company. 
  • Vedant has a differentiated business model combining the strengths of retailing with branded consumer play in the market.
  • They have an Omni-channel network and strong integrated offline and online channels of distribution and sales.
  • Vendant has technology-based supply chain and inventory management systems

Weaknesses of the company

  • The business is highly concentrated on a single segment i.e, the Indian wedding and celebrations market.  Any further covid related lockdowns or restrictions on weddings will impact the business as the sales will decline.
  • A significant portion of their sales come from their brand Manyavar. Any reduction in sales can affect their profits.
  • The segment is highly competitive. Therefore, the company has to anticipate and forecast the demand and trends in the market to gain leadership. 
  • The company is highly dependent on third-party manufacturers for outsourcing some of its attires and accessories.
  • Vedant has warehouses in and around Kolkata only. This geographical concentration makes it susceptible to regional risks.

Grey Market Information

Shares of Vedant Fashions traded at a 9.47% premium on January 31st. The shares were trading at Rs 948. This gives a premium of Rs 82 over the cap price of Rs 866.

Key IPO Information

Promoters: Ravi Modi, Shilpi Modi, and Ravi Modi Family Trust.

Book Running Lead Managers: Axis Capital Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IIFL Securities Limited, and Kotak Mahindra Capital Company Limited. 

Registrar to the issue: Kfin Technologies Private Limited.

ParticularsDetails
IPO SizeRs 3,149.19 Cr
Fresh Issue0
Offer for Sale (OFS)Rs 3,149.19 Cr
Opening dateFebruary 4, 2022
Closing dateFebruary 8, 2022
Face Value₹1 per equity share
Price Band₹824 to ₹866 per equity share
Lot Size17 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateFebruary 16, 2022

The objective of the Issue

(i) To achieve the benefits of listing the Equity Shares on the Stock Exchanges.

(ii)To carry out the Offer for Sale of up to 36,364,838 Equity Shares by the Selling Shareholders.

In conclusion

In this article, we covered the Vedant Fashions IPO Review. The Initial Public Offering opens on February 4, 2022, and closes on February 8, 2022. 

For investors, it can be a good opportunity to look into the company and apply for the IPO after analyzing the strengths and weaknesses of the company. Are you applying for the IPO? Let us know in the comments below. Happy Investing!

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