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Credo Brands Marketing IPO subscribed 6.95 times on Day 2

The Initial Public Offering of Credo Brands Marketing Limited was subscribed 6.95 times on the second day of bidding.

The issue received bids of 9,54,92,432 shares against the offered 1,37,44,472 equity shares, at a price band of ₹266-280, according to the data available on the stock exchanges.

Retail Portion was subscribed 8.78 times, Non-Institutional Investors Portion was subscribed 11.48 times, whereas Qualified Institutional Buyer Portion subscribed 0.35 times. The issue kicked off for subscription on Tuesday, December 19, 2023 and will close on Thursday, December 21, 2023.

A day prior to the opening of the issue, Credo Brands Marketing Ltd had raised Rs 165 crores from anchor investors. Foreign and Domestic Institutions who participated in the anchor were Integrated Core Strategies (Asia) Pte. Ltd., Morgan Stanley Asia (Singapore) Pte. ODI, Nippon India Small Cap, Aditya Birla SunLife Insurance, Kotak Mahindra Life Insurance, Bajaj Allianz Life Insurance, SBI General Insurance Company Ltd – FRSM, JM Financial Mutual Fund, Subhkam Ventures (I) Pvt. Ltd., and Reliance General Insurance.

Leading brokerages like Nirmal Bang, BP Equities, Sushil Finance, Swastika Investmart and Ventura Securities have given a “SUBSCRIBE” rating to the issue, through its MUFTI brand, Credo Brands showcases robust qualitative advantages including a strong brand equity across diverse products and a scalable, asset-light operational model. Despite a potential shortfall in projected profits for FY24 due to seasonal fluctuations, the company has exhibited impressive financial growth, doubling net profits and demonstrating significant improvement in net profit margins and ROE.”

“As per analysts, valuation-wise, the IPO offers a reasonable P/E ratio of 23.2x based on FY23 EPS, and it’s priced at a discount compared to its peers in terms of EV/EBITDA. While some quarters have seen a decline in performance, the overall picture presents a company with strong industry-leading margins, making it an attractive consideration for both short-term gains and long-term investment potential in the men’s fashion apparel sector within the lifestyle industry.”

DAM Capital Advisors Limited, ICICI Securities Limited and Keynote Financial Services Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer.

Company Information

Kamal Khushlani launched the brand “Mufti” 25 years ago with a vision to redefine menswear. It believes in providing a meaningful wardrobe solution for multiple occasions in a customer’s life, with our product offerings ranging from shirts to t- shirts to jeans to chinos, that caters to all year-round clothing. The products are designed to provide a youthful appearance while keeping up with the ongoing fashion trends.

Mufti’s product mix has evolved significantly over the past several years from consisting of only shirts and trousers to a wide range of products including t-shirts, sweatshirts, jeans, cargos, chinos, jackets, blazers and sweaters in relaxedholiday casuals, authentic daily casuals to urban casuals, party wear and also athleisure categories as on date.

The products are available through a pan-India multichannel distribution network that we have built over the years comprising of its exclusive brand outlets (“EBOs”), large format stores (“LFSs”) and multi-brand outlets (“MBOs”), as well as online channels comprising the website and other e-commerce marketplaces. As of September 30, 2023, it has a pan-India presence through 1,807 touchpoints consisting of 404 EBOs, 71 LFSs and 1,332 MBOs, with its reach extending from major metros to Tier-3 cities, with a presence in 591 cities.

The Mumbai-based Fashion retailer launched “Muftisphere” in the year 2014, a customer loyalty programme, to provide benefits to its customers for shopping the brand thereby increasing their stickiness with the brand. As on November 1, 2023, it had 137,000 followers on its Instagram page, 3.40million followers on its Facebook page and 15,200subscribers on its Youtube channel.

The table below shows subscription data for all the categories of investors:

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