IPO Note - Vedant Fashions Ltd By Choice Broking
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Salient features of the IPO:
• Vedant Fashions Limited (VFL), incorporated in 2002, offers Indian wedding & celebration wear for men, women & kids.
• The issue is purely OFS through which the company’s promoter & existing shareholders will sell 3.64 cr shares
• At the higher price band, OFS size is stood at Rs3,149 cr.
• Since the offer is 100% OFS, the company will not receive any proceed from the IPO.
Competitive Strengths
• Market leader in Indian celebration wear market with a diverse portfolio of brands catering to the aspiration of the entire family
• Large and growing Indian wedding and celebration wear market driven by an increased spending on such wear
• Differentiated business model combining the strength of retailing with branded consumer play
• Omni-channel network with the seamless integration of offline and online channels
• Technology-based strong supply chain and inventory replenishment system driven by system-wide data analytics, strong presence and longstanding vendor relationships
Valuation: At the higher price band of Rs866, the demanded valuation of Rs21,017 cr is derived at P/S of 37.2x on FY21E and 29.2x on FY22E annualized sales. On P/E front, the issue is valued at P/E of 106.8x on FY22 annualized EPS basis.
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