Vedant Fashions IPO: key details that an investor must know before investing

Vedant Fashions IPO: Vedant Fashions Limited, owner of ethnic wear brand Manyawar, will open its initial public offering (IPO) for subscription on Friday, February 4, 2022. The initial share sale will conclude on Tuesday, February 8, 2022.

The company aims at raising Rs 3,149.19 crore through this public offer. It has fixed a price band of the issue at Rs 824-866 per equity share.

A retail investor can apply for the IPO in lots and one lot will comprise 17 shares of the company, which makes a minimum investment of Rs 14,722 per lot (at upper limit). He can place bids for a maximum of 13 lots, which means the maximum investment can be Rs 1,91,386.

The public issue is purely an offer-for-sale of 3,63,64,838 equity shares by the promoter and existing shareholders. The OFS comprises the sale of

- Up to 1.74 crore shares by Rhine Holdings Ltd;

- Up to 7.23 lakh shares by Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF I

- Up to 1.81 crore shares by Ravi Modi Family Trust.

Since the IPO is entirely an offer for sale, the company will not receive any proceeds from the public issue.

Ravi Modi, Shilpi Modi and Ravi Modi Family Trust are the promoters of the company and they currently hold 76.38% in it, while 7.6% is held by investors, including Rhine Holdings owning 7.19%. After the sale, the share of the promoter and promoter group will reduce to 84.9% from 92.4%.

Half (50%) of the offering is reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors.

Axis Capital Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IIFL Securities Limited and Kotak Mahindra Capital Company Limited are the book running lead managers of the issue and KFin Technologies Private Limited is the registrar for it.

Share allocation of the public issue is likely on February 11, 2022, and the shares of Vedant Fashions, popularly known as Manyavar IPO, is likely to list at the domestic bourses (on NSE and BSE) on February 16, 2022.

The company, which filed its preliminary IPO papers with Sebi in September, obtained its observation letter on January 18, 2022.

The IPO aims to achieve the benefits of listing the equity shares on the stock exchanges. The company expects the proposed listing to enhance visibility and brand image, and enable shareholders to obtain greater liquidity.

Vedant Fashions, incorporated in 2002, has built a multi-channel network across the country. The company is a category leader in the branded wedding and celebration wear market under its flagship brand Manyavar, according to CRISIL Research. It houses five more brands—Mohey, Mebaz, Manthan and Twamev.

Vedant Fashions has also expanded its footprint over the last five years. As of September 2021, the company has an extensive retail network with 546 exclusive brand outlets (EBOs), including 58 shop-in-shops globally -- 11 overseas EBOs across the United States, Canada and the UAE, having a large Indian diaspora.