A Bengaluru-based fashion retailer is gearing up for a mega initial public offering (IPO), according to sources close to the development. The company, which operates a chain of stores across India, is expected to file its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) in the coming months.
IPO Details and Purpose
The IPO is anticipated to raise between INR 2,000 crore and INR 2,500 crore, making it one of the largest in the Indian fashion retail sector. The funds raised will be primarily used for expanding the retailer's store network, enhancing its digital capabilities, and repaying existing debt. The company plans to open new stores in tier-2 and tier-3 cities, leveraging the growing demand for branded fashion in smaller towns.
Market Position and Growth
The retailer has established a strong presence in the affordable fashion segment, competing with players like Zudio and V-Mart. It reported a revenue of over INR 1,500 crore in the last fiscal year, with a profit margin of around 8%. The company has been growing at a compound annual growth rate (CAGR) of 25% over the past three years, driven by its focus on value-for-money offerings and efficient supply chain management.
Industry analysts believe that the IPO will attract significant interest from both domestic and foreign institutional investors, given the retailer's consistent financial performance and the overall growth potential of the Indian fashion retail market. The Indian apparel market is expected to reach USD 100 billion by 2025, with the value segment growing the fastest.
Leadership and Future Plans
The company was founded in 2010 by two entrepreneurs who previously worked in the textile industry. It currently operates over 200 stores across 15 states and employs around 5,000 people. The founders will continue to hold a majority stake post-IPO, with plans to expand the store count to 500 by 2027.
In addition to physical stores, the retailer is investing heavily in its e-commerce platform, which now contributes 15% of total sales. The company aims to increase this share to 30% over the next three years through better technology and logistics.
The IPO is expected to be managed by leading investment banks such as Kotak Mahindra Capital, ICICI Securities, and JM Financial. The company is likely to list on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
