Sai Silks (Kalamandir) plans a Rs1,200 core Initial Public Offer

IPOs may not be happening in the last 2 months and even the companies that have got approval from SEBI are just waiting in the side lines. However, that has not prevented from fresh filing of draft red herring prospectus by the potential IPO candidates. Amidst the global market chaos, there is the forthcoming IPO of Sai Silks (Kalamandir). The store brands in Hyderabad are better known as Kala Mandir. Sai Silks is a Hyderabad-based apparel retailer, is planning to soon file draft documents with SEBI for its Rs1,200 crore IPO.

Incidentally, this is not the first time that Sai Silks (Kalamandir) is planning an IPO. It had planned an IPO in the year 2013, but had to put off the plans after the massive run on Indian equities as well as the rupee led to a sharp fall in the markets in mid-2013. At that point of time, the issue had been put off due to obvious reasons. The IPO fresh proceeds, this time around, will be used to expand. Sai Silks (Kalamandir) has a network of 45 retail outlets across South India with Kalamandir stores in Telangana, Andhra Pradesh and Karnataka.

Incidentally, Sai Silks (Kalamandir) derives most of its revenues from women’s garments, which contribute nearly 80% of its total sales. The company had steady operating income of Rs1,045 crore in FY19 and Rs1,177 crore in FY20. However, due to the pandemic, the operating income fell sharply to Rs679 crore in FY21. For FY22, the company has posted operating income of Rs450 crore in the first half of 2022, promising solid growth in operating income once again in the year FY22. It reported gross profits of Rs49 crore in H1.

The data from the second half of the FY22 year is still to come and the company is expecting steady growth in sales from all its stores in the second half.  This is likely to be ably backed by festival and wedding season shopping, which remains one of the peak season for women apparel. The issue will be lead managed by Motilal Oswal Financial, Edelweiss and HDFC Bank. They will also act as the book running lead managers to the issue.