India’s Largest Luxury Home Solutions Brand Stanley Lifestyles Files DRHP For Its IPO

In order to raise funds for its initial public offering (IPO), Bengaluru-based Stanley Lifestyles Ltd, the nation's largest super-premium and luxury furniture brand with a market share of 5.61% in terms of revenue in fiscal 2022, has filed its Draft Red Herring prospectus (DRHP) with capital market regulator Sebi. A fresh issue of up to Rs 200 crore and an offer for sale (OFS) of up to 9.13 million shares by promoter and investor-selling shareholders make up the initial public offering (IPO).

The offer is being made through the book-building process, in which not less than 15% of the offer must be allocated to non-institutional investors and not less than 35% of the offer must be allocated to retail individual bidders. Not more than 50% of the offer will be made available for allocation to qualified institutional buyers on a proportionate basis.

The offer for sale consists of up to 2.25 lakh equity shares from Sridevi Venkata Vuppalapati, up to 1 million equity shares from Kiran Bhanu Vuppalapati, up to 1.18 million equity shares from Sunil Suresh and Shubha Sunil, and up to 5.54 million equity shares from Oman India Joint Investment Fund II.

Oman India Joint Investment Fund made an investment in the company in 2018, acquiring a 26% ownership position. This was the first round of private equity investment for the company in question. The Oman India Joint Investment Fund II then provided the firm with an additional Rs 100 crore in financing in 2019.

The Oman India Joint Investment Fund held 13.86 million shares, or 26.86% of the company, as of that date, and it intends to sell 5.54 million shares in the Offer for Sale (OFS), according to the information provided in the Draft Red Herring Prospectus (DRHP). Investments in Divgi TorqTransfer, Annapurna Finance, PNB MetLife, Capital Small Finance Bank, My Digi Gold, ShopKirana, and HomeLane are also included in the portfolio of OIJIF II.

The company could speculate about issuing additional equity shares totalling up to Rs. 40 crore ("Pre-IPO Placement") after consulting with the issue's lead bankers. If such a placement is successful, the size of the new issue will be lessened.

According to the DRHP, Rs 90.13 crore of the proceeds from the fresh issue will be utilised for opening new stores, Rs 39.99 crore on opening anchor stores, Rs 10.04 crore on renovating existing stores, Rs 8.18 crore on funding capital expenditures needed for the company and its material subsidiary to purchase new machinery and equipment, SOSL, and general corporate purposes.

The rise in retail sales was the main factor in the fiscal year 2023's consolidated revenue from operations rising 43.39% to Rs 419 crore from Rs 292.20 crore the previous year. From Rs 23.22 crore in the fiscal year 2022 to Rs 34.98 crore in the fiscal year 2023, net profit grew by 50.65%. EBITDA climbed to Rs 82.72 crore in fiscal 2023 from Rs 59.01 crore in fiscal 2022, and the EBITDA margin dropped to 19.74% from 20.19% in fiscal 2022.

The book-running lead managers for the offer are Axis Capital Limited, ICICI Securities Limited, JM Financial Limited, and SBI Capital Markets Limited, while KFin Technologies Limited is the registrar. The equity shares of Stanley Lifestyles are proposed to be listed on BSE and NSE.