What You Must Know About Kizi Apparels IPO: Price Band ₹21 Per Share

About Kizi Apparels Ltd

Kizi Apparels Limited, established in March 2023, produces and sells ready to wear clothing through its showrooms, distributors, malls and online platform. The company has launched an ecommerce site offering premium ethnic women's clothing under the brand ANUTARRA and Western women's clothing under the brand KIZI. They serve customers across India through their online platform.

Highlights of Kizi Apparels IPO

Here are some of the highlights of Kizi Apparels IPO on a segment of the National Stock Exchange (NSE).

•    The subscription for Kizi Apparels IPO issue opens on 30 July 2024 and closes on 1 August 2024.

•    Kizi Apparels IPO is offering ₹10 face value shares. The price for these shares is set at ₹21.

•    Kizi Apparels IPO includes a fresh issue of 26.58 lakh shares at ₹21 per share raising ₹5.58 crores with no Offer for Sale.

•    Abhishek Nathani and Kiran Nathani have promoted the company. Kizi Apparels promoter’s ownership will decrease from 85.36% to 56.35% after issuing new shares.

•    The company will use fresh issue funds to repay unsecured loans and long term Working capital requirements.

•    Interactive Financial Services is the lead manager for Kizi Apparels IPO. Bigshare Services is the registrar and Beeline Broking is the market maker.

Objective of the Issue

The funds raised from the IPO will be used for:

•    Repayment of unsecured Loans

•    Long-term Working capital requirement

•    General Corporate Purpose

•    Meeting Public Issue Expenses

Kizi Apparels IPO – Key Dates

The IPO for Kizi Apparels will be open for subscription from July 30, 2024, to Aug 1, 2024. The allocation of shares to investors will be finalized on 2 Aug 2024. Refunds for unsuccessful applications will be processed on Aug 5, 2024 and shares will be credited to the investor’s demat accounts on 5th Aug. The shares will start trading on the BSE SME Platform on August 6, 2024.
 

Kizi Apparels Issue Details/ Capital History

Kizi Apparels Limited is launching its IPO offering 2,658,000 equity shares at a fixed price of ₹21 per share, aiming to raise ₹5.58 crore. Kizi Apparels IPO opens on July 30, 2024 and closes on August 1, 2024. The minimum application is for 6,000 shares and shares will be listed on BSE SME. This IPO will make up 33.99% of the company's post IPO paid up capital.

The company will spend ₹0.60 crore on the IPO process. The remaining funds will be used as follows ₹0.30 crore for repaying unsecured loans, ₹3.49 crore for working capital and ₹1.20 crore for general corporate purposes.

Interactive Financial Services is managing the issue, Bigshare Services is the registrar and Beeline Broking is the market maker. Initially, shares were issued at face value, and later at ₹21 per share in June 2023. Average cost of shares for promoters is ₹12.00 and ₹24.63 per share.

Post IPO, the company’s paid up equity capital will increase from ₹5.16 crore to ₹7.82 crore. Based on the upper IPO price band, the company aims for a market cap of ₹16.42 crore.

IPO Allocation & Minimum Investment Lot Size

Net offer from Kizi Apparels will be distributed among QIBs, retail investors and HNIs / Non-Institutional Investors (NIIs). The breakdown of the overall IPO of Kizi Apparels in terms of allocation to various categories are captured below.
 

Retail investors can participate in the IPO by buying a minimum of 6000 shares, which requires an investment of ₹126,000. This is also maximum limit for retail investors to apply in Kizi Apparels IPO. High Net-Worth Individuals (HNIs) and Non Institutional Investors (NIIs) must invest in at least 2 lots, or 12000 shares, amounting to a minimum of ₹252,000. Qualified Institutional Buyers and HNIs/NIIs have no upper limit on their investment and can contribute any amount. The table below provides details on the lot sizes for each investor category.
 

About Kizi Apparels

Kizi Apparels Limited, established in March 2023, produces and sells ready to wear clothing through its showrooms, distributors, malls, and online platform. The company has launched an e-commerce site offering premium ethnic women's clothing under the brand ANUTARRA and Western women's clothing under the brand KIZI. They serve customers across India through their online platform.

Their product range includes kurti sets, kurtis, churidaars, co ord sets, semi formal blazers, shirts, blouses, tops/tunics, dresses, palazzos, skirts and dupattas. As of June 30, 2024, Kizi Apparels has 18 permanent employees, not including the directors.
 

Strengths

•    Quality: The Company is dedicated to delivering top quality garments that last, embodying the brand's essence.

•    Partnership: The company values creating mutually beneficial partnerships, building strong, trust-based relationships for lasting success.

Risks

•    Dependence on Top Clients:  Almost 96% of the company’s revenue comes from its top 10 customers. If any of these major clients reduce their business with the company, it could impact revenue and profitability.

•    Negative Cash Flows: The company has experienced negative cash flows from its operations over the past three years. Extended periods of negative cash flow or short term losses could hinder the company’s ability to run its business and pursue growth plans.

•    Reliance on Third-Party Transport: Kizi Apparels depends on third party transport services for delivering raw materials and finished garments. If these transport providers fail to meet their obligations, it could negatively affect the company’s business, financial health and operational results.

Kizi Apparels – Financial Highlights

The table below captures the key financials of Kizi Apparels for the last 3 completed financial years.
 

Over the past three fiscal years, Kizi Apparels Limited has shown notable growth in several key financial metrics. The company's assets increased from ₹725.14 lakh in FY22 to ₹1,340.30 lakh in FY24, reflecting its expanding operational base. Revenue also saw a rise, climbing from ₹539.17 lakh in FY22 to ₹2,027.37 lakh in FY24, indicating strong business growth and market presence. Profit after tax improved from ₹20.64 lakh in FY22 to ₹72.21 lakh in FY24, showcasing enhanced profitability.

The company's net worth has also strengthened rising from ₹336.95 lakh in FY22 to ₹587.49 lakh in FY24, reflecting increased equity value. However, total borrowings have grown from ₹242.73 lakh in FY22 to ₹514.61 lakh in FY24, suggesting a reliance on debt to finance growth and operations. Despite this, the overall financial trajectory of Kizi Apparels Limited demonstrates substantial growth and an expanding market footprint.