Vedant Fashions IPO: Subscription Status on Day Three

The IPO of Vedant Fashions, the parent company of ethnic wear brand Manyavar, was subscribed 2.57 times on its third day of bidding, 8 February 2022. The public issue received bids for 6,53,72,718 shares, whereas 2,54,55,388 shares were put on offer, as per data available on NSE.

Vedant Fashions is an ethnic wear maker well-known for the Manyavar brand, under which it sells Indian wedding and celebration wear. Incorporated in 2002, this Kolkata-based company is a category leader in branded wedding and celebration wear market.

On 4 February 2022, Vedant Fashions opened an Initial Public Offering (IPO) to raise funds up to Rs. 3,149 crores. It was a pure OFS (offer for sale) by existing shareholders and promoters. The price band for this public issue for the sale of 3.64 crores shares was set at Rs. 824 to Rs. 866 per share.

The following sections will describe how different investor segments responded to this IPO as of its closing date.

Day 3 Performance Status of Vedant Fashions IPO

The following points will tell us how Vedant Fashions IPO was subscribed in different investor segments:

• The category of Qualified Institutional Buyers (QIB) received bids for 5,44,92,514 equity shares, whereas 72,72,968 shares were allotted for it.

• Non-Institutional Investors (NII) had a total allotment for 54,54,726 equity shares and received bids for 58,55,038 shares.

• Retail Individual Investors (RII) attracted bids for 50,25,166 equity shares on the final day of subscription. This investor category was allotted 1,27,27,694 shares in total.

The table given below describes how many times each investor category subscribed to the IPO.

Vedant Fashions IPO had reserved half of the issue size for QIBs, 15% for NIIs and the remaining 35% for the retail segment (RIIs).

A Brief Overview of Vedant Fashions’ Anchor Allotment

Before heading into the public issue, Vedant Fashions IPO opened for anchor investors on 3 February 2022. It was a robust response, with a total of 75 anchor investors purchasing 1,09,09,450 equity shares. The company allotted these at the upper price band of Rs. 866 raising a total of Rs. 944.76 crores.

Here are the top 10 anchor investors with a stake in Vedant Fashions.

Other anchor investors participating in this IPO included Axis Mutual Fund, Sundaram, ICICI Pru Fund, Monetary Authority of Singapore, Elara Funds, Avendus and Carmignac, etc.

Vedant Fashions will not receive proceeds from this IPO as it is a pure OFS. The following are the objectives of this IPO.

• The selling shareholders, including Kedaara Capital Alternative Investment Fund and Rhine Holdings Ltd and promoter Ravi Modi Family Trust, would receive funds from the IPO.

• The company aims to achieve the benefits of listing its shares on the stock exchanges.

• It will enhance Vedant Fashions’ visibility and brand image.

Day 1 and Day 2 Performance Status of Vedant Fashions IPO

The below table details how many times investors subscribed to the IPO across various investor segments:

Parting Thoughts

Vedant Fashions is a market leader in branded wedding and celebration wear, according to information from Crisil Research. It derives most of its revenues from exclusive brand outlets operated by franchises. This market segment is slated to grow in the upcoming years at an annualised rate of 18-20% by FY 25.

However, COVID-19 had affected Vedant Fashions’ revenues considerably. It is also highly dependent on a single product category and the frequency of weddings in the country. As such, one may want to be cautious and do adequate research before investing.

Source: NSE

Frequently Asked Questions

1. What is the financial situation of Vedant Fashions in FY 22?

Thecompany’s revenue was affected by the COVID-19 pandemic but recovered in the first half of the current fiscal as lockdown restrictions were lifted. As of its last annual financial report, it had a total income of Rs. 599.97 crores and PAT (Profits after Tax) of Rs. 130.74 crores.

2. What is the state of Vedant Fashions’ retail network?

Vedant Fashions has a nationwide retail presence in India and three other countries with a large Indian diaspora – the US, Canada and the UAE. As of September 2021, it operates 546 EBOs (Exclusive Brand Outlets) globally, including 58 shop-in-shops. In FY 21, these EBOs accounted for 90.14% of the company’s revenue.

3. What will be the dates of share allotment and listing?

The date of share allotment for Vedant Fashions IPO is 11 February 2022. The shares of this IPO will be listed on both the NSE and BSE on 16 February 2022, according to its DRHP.

4. Who are the lead managers for Vedant Fashions IPO?

The following are the lead managers of this IPO:

• IIFL Securities Ltd.

• Kotak Mahindra Capital Co.

• Axis Capital Ltd.

• Edelweiss Financial Services Ltd.

• ICICI Securities Ltd.

5. Who were the largest stakeholders of Vedant Fashions before its IPO?

The promoters Ravi Modi and Shilpi Modi and the promoter group Ravi Modi Family Trust altogether holds 76.38% stake in the company. Investors like Rhine Holdings Ltd and Kedaara Capital Alternative Investment Fund owned a 7.19% stake before share sale.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.