Credo Brands Secures Rs 165 Crore from Anchor Investors Prior to IPO Launch

Credo Brands Marketing Ltd, the company behind the popular denim brand Mufti, announced on Monday that it has successfully raised Rs 165 crore from anchor investors in preparation for its upcoming initial public offering (IPO).

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Anchor Investors

The company allotted 58.9 lakh equity shares to 11 prominent funds at a price of Rs 280 per share, which represents the upper end of the price band specified in the company's prospectus. The anchor investors who participated in this pre-IPO placement include renowned financial institutions such as Nippon Mutual Fund, HSBC Mutual Fund, JM Mutual Fund, Aditya Birla Sunlife Insurance, Kotak Mahindra Life Insurance Company, Bajaj Allianz Life Insurance Company, Integrated Core Strategies Asia, Morgan Stanley Asia, SBI General Insurance Company, and Reliance General Insurance Company.

Offer for Sale

Credo Brands' maiden public issue is structured entirely as an offer for sale (OFS), where promoters and existing shareholders will offer up to 1.96 crore shares for sale in the market. The price band for the IPO has been set between Rs 266 and Rs 280 per share.

Subscription Dates and Expected Proceeds

The IPO will open for public subscription from December 19 to December 21, 2023. At the lower end of the price band, the IPO is expected to raise approximately Rs 522 crore, while at the upper end, it could fetch up to Rs 550 crore.

Reservation and Bidding

The issue has been divided among different investor categories, with 50% reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional buyers. Investors can bid for a minimum of 53 equity shares and in multiples of 53 shares thereafter.

Company Profile

Credo Brands Marketing is a leading homegrown brand in India's mid-premium and premium casual menswear market. As of September 2023, the company has a widespread presence across the country with 1,807 touchpoints, including 404 exclusive brand outlets (EBOs), 71 large format stores, and 1,332 multi-brand outlets (MBOs).

Financial Performance

Credo Brands has demonstrated strong financial growth in recent years. In fiscal 2023, the company's revenue from operations surged by 46% to Rs 498.18 crore compared to Rs 341.17 crore in the previous fiscal year. Moreover, its profit after tax witnessed an impressive 117% increase, rising from Rs 35.74 crore in fiscal 2022 to Rs 77.51 crore in fiscal 2023.

Book-Running Lead Managers

DAM Capital Advisors, ICICI Securities, and Keynote Financial Services are acting as the book-running lead managers for the IPO. The equity shares of Credo Brands Marketing are proposed to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The successful anchor investor placement and strong financial performance of Credo Brands Marketing indicate positive investor sentiment ahead of its upcoming IPO. The company's established presence in the menswear market and its track record of growth position it as a promising investment opportunity for discerning investors.