Campus Activewear IPO Analysis | Should you apply for Campus IPO?

About Company:

Campus shoes, at one point or another you must have worn the shoes of this company. This company is a well-known and everyday brand in the country. The shoes of this company are very much liked in the rural areas of the country. Now this company is also bringing you an opportunity to earn money. company is going to be listed in the stock market very soon. 

The company distributes a variety of footwear like Running Shoes, Walking Shoes, Casual Shoes, Floaters, Slippers, Flip Flops, and Sandals, available in multiple colors, styles, and at affordable prices. Today we will tell you about the upcoming IPO of Campus Activewear Limited. First, let's talk about the company. The campus started in 2005 and is today India's largest sports and activewear footwear brand in terms of value and volume. 

The company had a 17% market share in the branded sports and activewear footwear industry in India in FY21. The campus is one of the few Indian brands that are present in the sports and activewear market in India. This space is dominated by major international brands like Nike, Adidas and Puma. The company addresses 85% of the S&A footwear market in India. Through its product which is present in all four sub-segments of the industry in entry level, premium, semi-premium, and premium plus.

 

The company's core target market is the age group of 14 to 35, which represents 44% of India's sports and athleisure market share. There are 48 designers in the company's in-house design team. And these typically products launch 120-180 days after conceptualization. The company launches products under its sales strategy and produces additional products with high-velocity sales in the spring, summer, and winter, in-seasons seasonal collections. They identifies products, for which there is a demand study. Throughout the season they ensure that it is never out of stock. 

Financials:

In the fiscal year 2022, their product portfolio of 1433 active styles for men, 241 active styles for women, and 485 active styles for kids. The company sold 13.65 million pairs in FY 2022, taking the total to over 13 million in FY20. As of 31st December 2021, the company's network consists of more than 425 distributors and more than 19200 retailers.

Which they do in 664 cities in 28 states. ABO's owns Fifty Seven Company stores and 28 franchises. The company's online sales generated 28% of its revenue in FY21. Of their total revenue share, 72.9% of sales came from Tier 2 and Tier 3 cities. And their biggest market was the northern region. The revenue of that region is more than 53%. 

Campus has a total capacity of 28.8 million pairs and their net manufacturing process requires 16.67% of the uppers and 37.5% of the soles to be produced in-house. All the finished products are assembled in-house. With this IPO, the company wants to provide an exit to its selling shareholders and wants to take listing benefits.

On the financial performance front, for the last three fiscals, CAL has (on a consolidated basis) posted total revenue is INR 596.70 crore, whereas net profit recorded INR 38.60 crore in FY19, In FY20 INR revenue, is 734.12 crore, and net profit INR 62.37 crore, and INR 715.08 crore revenue in FY21 and net profit recorded  INR 26.86 crore. For the 9 months of FY22 ended on 31st December 2021, it has earned a net profit of INR 84.80 crore on a turnover of INR 843.95 crore.

 

Strengths:

Now let's talk about the strength of this company to invest in this IPO, Expectation is India's sports and activewear market to grow at 21% CAGR to a market size of 22,000 crores by FY 2025.

There are many factors behind the growth of this market. Like post covid-19 focus on health and fitness, social media athletes domestic support stars, and fitness influences rise, retail footwear industry rise, local brand preference over international brands in the entry segment.

Due to the company's in-house manufacturing capability and 100% in-house assembling, it is well stocked in lead time as compared to other rivals.

And due to their high sourcing exclusivity the product is under strict quality control.

The company have experienced management team.

 

Risk:

Now let's talk about the risk of the company, for investing in this IPO.

The company's biggest weakness is its over-reliance on men's shoes. In FY21, 83% of sales came from the company's menswear segment and there are more than 1400 active men's styles. While the rest of the categories have just over 700 styles. Although, the industry in the men’s category with a 52% market shares, they are unable to focus on the women's category, and other areas of the company.

In this very high competition in India's sports and activewear market, it is competing with many international brands like Nike, Adidas, Puma, and many more domestic footwear brands like Relaxo, Khadim’s shoes, etc.

Market development here is very difficult, as low market price competition remains high, and high strength and pricing power in the top segment, mostly driven by international brands. This shows that increasing the market share in the campus will be very difficult in any segment.

Right now the company has many big concerns as there is a lot of competition in the footwear market. Many foreign brands are occupied in this segment. It will not be easy for the company to overcome this.

 

Campus Activewear Limited IPO Details:

It is a lifestyle-oriented footwear brand. The campus has more than 400 distributors across the country. The company's business is spread across 625 cities in 18 states. The Delhi sports and footwear brand is looking to expand its network. The company plans to expand its footprint in West and South India. Apart from this, campus shoes plan to enter the business of expensive items for women and children.

IPO is the complete offer for sale. That is, the amount raised from the IPO will go to the promoter's pocket and the company will not get anything. Rajesh Kumar Gupta will sell his 2 lakh shares in OFS. Promoters will sell their stake in the market through IPO. The promoter Harikishan Agarwal's eight million shares would be sold, while Nikhil Agarwal's 45 lakh shares, 2,91,00,000 shares would be sold by TPG Growth, QRG Enterprises will be sold 60.5 lakh shares and Rajiv Goyal will be sold his1,00,000 shares. 

The campus is getting 20% of business from digital sales which have increased from INR 20 crores to INR 400 crores in the last three years. The company claims that the company has control of 17% of the entire market in the country. In the December quarter, the company earned revenue of INR 843 crore, while there was a profit of INR 85 crore.

The company plans to raise INR 1400 crores through IPO.

IPO has 51 shares in one lot. That is, INR 14892 will have to be applied for the application of a lot.

A maximum of 13 lots can be applied for. INR 1, 93,596 will have to be invested for 13 lots.

The Face value of the IPO is INR 5 per equity share.

The IPO listed both NSE and BSE.

IPO Opening Date – 26^th April 2022

 

IPO Closing Date – 28th April 2022

 

Issue Type – Book Built Issue IPO

 

Face Value – INR 5 per Equity Share

 

IPO Price - INR 278 – INR 292 per Equity Share

 

Market Lot Size – 51 Shares

 

Minimum Order Qty. – 51 Shares

 

Listing – IPO listed on both BSE and NSE

 

Issue Size – Up to INR 1400.14 Crore

 

Offer for Sale – 47,950,000 per Equity Share of INR 5.0

 

QIB Shares Offered - 50%

 

Retail Shares Offered – 35%

 

NII(HNI) Shares Offered – 15%

Allotment Date – 4th May 2022

 

Initiation of Refund – 5th May 2022

 

A credit of Shares – 6th May in your Demat account

 

Listing Date – 9th May 2022

 

Here How to Check Share Allotment Online:

The allotment can be checked on the BSE Website.

Select equity share (Campus Activewear Limited.)

Enter application no. and PAN no.

Finally check the box (I’m not a robot) and click on search.

In addition, campus shoes are dependent on third parties for manufacturing. The bulk of the company's sales come from India. The company also needs to increase its penetration abroad. Now you have to decide whether you want to invest in campus shoes or not. If you liked the information given in this article, then please comment on our site www.tradeipohub.co.in. This blog is only for educational purposes and does not contain any buy or sell recommendations of any kind.