After the listing, analysts also advised investors to maintain a cautious approach.
“Despite the disappointing listing, Credo Brands still possesses its core strengths, including a strong brand, a wide distribution network, and consistent financial performance. However, the flat debut highlights the potential risks associated with the highly competitive market, seasonality, and current market sentiment,” said Shivani Nyati, Head of Wealth, Swastika Investmart.
“Given the uncertain outlook, a cautious approach is warranted, and investors may consider exiting their holdings, but long-term investors with high-risk capacity may hold their position by keeping stop loss,” Nyati said.
At 11.09 am, the stock was trading 3.5% higher at Rs 292 on BSE.
The IPO of Credo Brands received a healthy response from investors with nearly 52 times subscription. The QIB portion of the IPO was booked 104 times, followed by NIIs at 55.52 times.
Credo Brands Marketing is one of the largest homegrown brands in the mid-premium and premium men’s casual wear market in India in terms of market share in fiscal 2022.Led by Kamal Khushlani, Credo Brands operates the brand “Mufti” which is now celebrating its 25th anniversary. It provides a wide array of wardrobe solutions, encompassing a range of products such as shirts, t-shirts, jeans, chinos, and more.
As of May 31, 2023, the company has a presence across India with 1,773 touchpoints, including 379 EBOs (exclusive brand outlets), 89 large format stores, and 1,305 MBOs (multi-brand outlets), reaching major metros as well as Tier-3 cities. Their EBOs, located nationwide in high streets, malls, airports, and residential areas, provide a comprehensive shopping experience.
The issue was completely an offer for sale of 1.96 crore shares. Since the IPO is an OFS, the proceeds will entirely go to the selling shareholders and not the company.
In FY23, revenue from operations jumped 46% year-on-year (YoY) to Rs 498 crore, and profit increased to Rs 77.5 crore in the same period.
DAM Capital, ICICI Securities, and Keynote Financial Services acted as the book-running lead managers to the IPO and Link Intime India is the registrar to the offer.
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