IPO listed on 27 Sep'23
Sai Silks (Kalamandir) Ltd IPO
Minimum Investment
₹ 14,874 / 67 shares
Grey market premium
₹ 7 (3% premium)
Issue price
₹ 222
Listing price
₹ 231
Listing gains
9 (4%)
Listing on
Sep 27, 2023
Our Verdict:
Avoid
- SSKL exhibits a steady growth trajectory in terms of both its revenues and earnings, complemented by impressive return ratios and decent margins. However, from a valuation standpoint, the IPO appears to be fully priced at a PE multiple of 35x on post-issue capital, discounting all near-term triggers.
- Additionally, the grey market premium (GMP), often used as an indicator to gauge investor sentiment, indicates a tepid listing.
- It's essential for potential investors to be aware that the company previously attempted to initiate its IPO in February 2013, but couldn't secure full subscription due to lack of institutional support and consequently had to withdraw. Thus, investing in this IPO could be risky.
About the company
Founded in
3 Jul'08
Managing director
Nagakanaka Durga Prasad Chalavadi
- Between FY20-22, Sai Silks (Kalamandir) Ltd (SSKL) ranked among the top 10 ethnic apparel retailers in south India, especially in saree sales, based on their revenue and net profit. They cater to a wide range of market segments through their four store brands: Kalamandir, VaraMahalakshmi Silks, Mandir, and KLM Fashion Mall.
- As of July 31, 2023, their 54-store network serves an expanding clientele of over 5.98 million customers in India.
STRENGTHS
- Impressive Track Record: From FY21 to FY23, SSKL demonstrated a notable rise in revenues, growing at a CAGR of 41%. This was complemented by an 85% increase in EBITDA and a remarkable 336% surge in Net Profit.
- Robust Profitability & Financial Metrics: The EBITDA Margin climbed from 9.2% in FY21 to 15.7% in FY23. Additionally, in FY23, SSKL achieved a strong 28% Return on Equity and a 24% Return on Capital Employed.
- Decreasing Net Debt/EBITDA Ratio: This ratio, which indicates the operating income available for paying off long-term debts, has shown a consistent decline. It went from 1.25 in FY21 to 0.52 in FY22 and further fell to 0.44 in FY23.
RISK FACTORS
- Regional Dependence: SSKL predominantly operates in the southern regions of India, with a significant focus on Telangana. Specifically, it earns its entire revenue from the southern states and it has no intentions of expanding beyond these areas.
- Past IPO Attempt: In February 2013, SSKL tried to launch its inaugural IPO, aiming to raise Rs 89 crore within a price band of Rs 70-75. The IPO received Grade '2' indicating poor fundamentals, and due to a lack of interest from institutional investors, it failed to secure full subscriptions and was eventually withdrawn.
- Retail Business Nature: Being in the retail sector, the company's operations heavily rely on working capital and are influenced by seasonal factors. It's crucial for them to have a substantial inventory to ensure product availability at all times. If they fail to sustain the needed inventory levels, their business might face negative repercussions.
Issue details
Issue type
Mainstream
Issue size
₹ 1,201 crore
Fresh Issue
₹ 600 crore
OFS
₹ 601 crore
Price range
₹ 210 - 222
Lot size
67 shares
Issue Objective
Net proceeds from the fresh issue will be utilised for:
- Funding capital expenditure towards setting up 25 new stores and 2 new warehouses;
- Funding the working capital requirements of the company;
- Repayment or pre-payment of certain borrowings availed by the company; and
- General corporate purposes.
Dates
Bidding open
20 Sep'23
Bidding close
22 Sep'23
Allotment date
25 Sep'23
Refund date
26 Sep'23
Listing
27 Sep'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.