Vedant Fashions IPO: Vedant Fashion is the largest company in the men’s Indian Wedding & Celebration wear segment in India. Their flagship brand Manyavar is the market leader in its category in India which was launched in 1999.
The company has 2 more brands in men’s Indian wedding wear which are Twamev and Manthan. The company also has a brand in women’s Indian wedding wear Mohey which was launched in 2015.
Vedant Fashions IPO Details
| IPO Opening Date | 04 Feb 2022 |
| IPO Closing Date | 08 Feb 2022 |
| Listing Exchanger | NSE, BSE |
| Face Value | ₹1 Per equity share |
| Market Lot Size | 17 shares |
| Issue Type | Book Built issue IPO |
| IPO Price | ₹824 to ₹866 per equity share |
| Listing Date | 16 Feb 2022 |
| Allotment Date | 11 Feb 2022 |
| Order Size | 1 lot size |
| Offer for Sale | ₹3149.19 Cr |
| Fresh Issue | 0 |
| IPO Issue Size | ₹3149.19 Cr |
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About Vedant Fashions Company
The company’s products are sold through 4 main channels:
- Franchisees Own Exclusive Brand Outlets (EBOs)
- Multi Brand Outlets (MBOs)
- Large Format Stores (LFS), and
- Online Platform
In financial year 21 of the company, 90.14% of the sales were generated from their EBOs while around 6% of the sales came from MBOs. In financial year 21, only 1% and 2% of sales came from LFS and online platforms respectively.
As of September 2021, the company’s retail footprints had 535 EBOs covering 212 cities and towns. They also have 11 international EBOs in the USA, Canada, and UAE.
The company has run many successful value target brand campaigns, which include Diwali Feeling, Shaadi Grand Hogi, Wear Apni Pehchaan, Aapne Waali Shaadi, and Wedding Expenses and Half-A-Half.
The company has also roped in popular actresses such as Ranbir Singh, Kartik Aaryan, Amitabh Bachchan, Alia Bhatt, and former Indian cricket captain Virat Kohli as brand ambassadors.
The company’s Geographical Revenue Distribution from EBOs in the financial year 21 was 44.22% of EBO sales from Tier 1 cities, 42.05% of EBO sales from Tier 2 cities, 12.31% of EBO sales from Tier 3 cities, 1.42% of EBO sales from International.
With this IPO, the company is providing its existing selling shareholders to exist and wants to take listing benefits.
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Vedant Fashions Company’s Financials
| Revenue | ₹819.80 Crores | FY19 |
| Total Assets | ₹1318.50 Crores | FY19 |
| Profit after tax | ₹176.4Crores | FY19 |
| Revenue | ₹947.98 Crores | FY20 |
| Total Assets | ₹1591.55 Crores | FY20 |
| Profit after tax | ₹236.6 Crores | FY20 |
| Revenue | ₹625 Crores | FY21 |
| Total Assets | ₹1625.65 Crores | FY21 |
| Profit after tax | ₹132.9 Crores | FY21 |
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Pros of Vedant Fashions IPO
The readymade garment industry in India is expected to grow at a CAGR of 18% to 20% by the financial year 25, due to which there is a lot of scope for market expansion for a segment leader like Manyavar. Especially when there are very few rivals in their organized sector.
Among these, the Manyavar segment is expected to have the highest growth rate, in which the wedding and celebration wear segment is expected to grow at a CAGR of 18% to 20% by 2025.
The brand in the men’s wedding and celebration wear segment was currently 20% to 25% in the financial year 20 and it is estimated that this will increase to 40% to 45% by 2025.
This can greatly benefit Vedant Fashion as there are 7 recognized brands in this segment out of which 4 Vedant Fashion is already present which are Manyavar, Twamev, Manthan, and Mohey.
Vedant Fashion is India’s only Wedding & Celebration wear company having brands in premium, mid-market, and mass segments due to which they have a lot of cross-selling opportunities in terms of matching customer prices and other preferences.
In addition, the company has a much higher margin profile in its segment than the rest of the competition with a Net Profit Margin of 26% in financial year 20 versus the second player which only at 5% NPM.
With this, the brand strength of the company and its operational advantages are also easily known.
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Cons of Vedant Fashions IPO
More than 90% of the company’s sales come from their EBO, due to which they had a huge hit with Pandemic when the stores were closed and the in-store footfall was reduced. Due to this, their overall sales number is still 20 to 30% less than the per covid level.
The company’s sales come from men wearing which is used only on special occasions and the overall customer lifetime sales value is much lower than other segments in terms of replacement volume and value.
The majority of the company’s manufacturing comes from third-party manufacturing, due to which they may have to face the supply chain and quality control risk.
Their top five jobs exceed almost 39.5% of the total employment expenses, which shows that they have third-party concentration risk where the loss of any of these top five workers can cause significant damage to the production capacity of the company.
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This article is only for education purpose and the author has his own views and research, so if you invest in these stocks then do it at your own risk and do the research yourself before investing.
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FAQ: Vedant Fashions IPO
Vedant Fashion is the largest company in the men’s Indian Wedding & Celebration wear segment in India. Their flagship brand Manyavar is the market leader in its category in India which was launched in 1999.
The company’s Geographical Revenue Distribution from EBOs in the financial year 21 was 44.22% of EBO sales from Tier 1 cities, 42.05% of EBO sales from Tier 2 cities, 12.31% of EBO sales from Tier 3 cities, 1.42% of EBO sales from International.
Vedant Fashion is India’s only Wedding & Celebration wear company having brands in premium, mid-market.
This can greatly benefit Vedant Fashion as there are 7 recognized brands in this segment out of which 4 Vedant Fashion is already present which are Manyavar, Twamev, Manthan, and Mohey.
The majority of the company’s manufacturing comes from third-party manufacturing, due to which they may have to face the supply chain and quality control risk.
More than 90% of the company’s sales come from their EBO, due to which they had a huge hit with Pandemic when the stores were closed and the in-store footfall was reduced. Due to this, their overall sales number is still 20 to 30% less than the per covid level.