Khadim is one of the leading organized footwear retailers in India and involved in whole-selling and distribution of branded basic utility footwear. Khadim’s has grown to 829 Khadim’s branded exclusive retail store outlets as on March, 31,2017 in 23 states and 1 Union Territory nationally
Issue Details of Khadim India IPO:
- IPO Open: 2nd Nov – 6th Nov 2017
- Issue Price band: Rs 745 – 750
- Issue Size: Rs crore
- Market lot: 20 shares
- Minimum Investment: 15000 (Rs 750 per share)
- Max Investment for Retail Investor – xx shares
- Book Running Lead Managers: Axis Capital
- Registrar: Link Intime
- Listing: BSE/NSE
- Download – Khadim India IPO Red Herring Prospectus
Khadim India IPO Grey market Premium :
- 22.10.2017 GMP Rs per equity share
IPO Issue Allocation:
- Qualified institutional buyers (QIBs) – 50% of the offer.
- Non-institutional bidders – 15% of the offer.
- Retail individual bidders – 35% of the offer.
Background:
The compnay is one of the leading footwear brands in India, with a two-pronged focus on retail and distribution of footwear. The company is the second largest footwear retailer in India in terms of number of exclusive retail stores operating under the ‘Khadim’s’ brand, with the largest presence in East India and one of the top three players in South India.
As at March 31, 2017, we operated 829 ‘Khadim’s’ branded exclusive retail stores across 23 states and one union territory in India, through our retail business vertical. Further, we had a network of 357 distributors in fiscal 2017, in our distribution business vertical.
Industry Overview:
Top Shareholdings: Top Shareholders:
- Siddhartha Roy Burman: 12.56%
- Knightsville Private Limited: 50.51%
- Fairwinds: 33.83%
Objective of the issue: The Net Proceeds from the Fresh Issue are proposed to be utilised towards the following objects:
1. Prepayment or scheduled repayment of all or a portion of term loans and working capital facilities availed by the Company; and
2. General corporate purposes.
Anchor Investors: One day before the issue.
Financials:
| in crores | Revenue | Growth | PAT | Growth |
| 2017 | 626 | 16% | 30.7 | 22% |
| 2016 | 539 | 16% | 25.2 | |
| 2015 | 465 | -18% | -18.6 | |
| 2014 | 483 | 12% | 12.1 | 36% |
| 2013 | 425 | 8.9 | ||
The company has long term liabilitie sof Rs 10 crores which is not too high.
EPS for the last 3 years is 17.78 (2017), 14.59 (2016) and -12 (2015).
At the issue price of Rs 750, the PE ratio of 42 seems too high.
Valuation as compared to its peers:
| Similar Companies | CMP | Market Cap | PE Ratio |
| Bata India | 776 | 9972 | 59 |
| Relaxo | 529 | 6354 | 51 |
| Liberty | 247 | 421 | 86 |
Brokerage Recommendations:
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Should you invest: The IPO price seems reasonable as compared to its listed peers. As the company has good brand and reasonable price, the members can consider to invest in this IPO.