GMP, Valuation, Strength, Financials; Should you Invest?

Campus Activewear IPO (Initial Public Offering) will open for subscription from today and public issue worth Rs 1400 crore will remain open for subscription till April 28, 2022. Campus Activewear incorporated on September 24, 2008, is primarily engaged in the manufacture, distribution and sales of sports and athleisure footwear. The Rs 1,400 crore Campus Activewear IPO offer is entirely an offer for sale (OFS) of 4.79 crore equity shares by promoters and existing shareholders. The offer includes a reservation of up to 2 lakh shares for employees who will get those at a discount of Rs 27 per share to the final offer price.

Campus Activewear IPO: Price Band & Lot Size

The price band for the offer has been fixed at Rs 278-292 per share. Investors can bid for a minimum of 51 equity shares and in multiples of 51 shares thereafter. Retail investors can make a minimum investment of Rs 14,892 for one lot and their maximum investment would be Rs 1,93,596 for 13 lots. Half the offer is reserved for qualified institutional buyers, 15 percent for non-institutional bidders and the remaining 35 percent for retail investors.

Campus Activewear IPO: Listing and Allotment Date

Allotment of IPO shares will be finalised on May 4, whereas initiation of refunds will kick off from May 5. Shares will be credited into demat accounts on May 6. IPO listing is likely by May 9.

Delhi’s headquartered Campus Activewear manufactures and distributes a variety of footwear like running shoes, walking shoes, casual shoes, floaters, slippers, flip flops, and sandals in multiple colours and styles at affordable prices. Campus Activewear sells its products through online platforms and offline stores. It has a pan-India trade distribution network, with over 400 distributors in 28 states and 625 cities. The company also has 18,200 retailers across India.

Campus Activewear IPO: GMP

According to market observers, Campus Activewear IPO GMP (grey market premium) today is Rs 72, which means grey market is expecting this IPO to list at around Rs 364 ( Rs 292 + Rs 72).

Campus Activewear IPO: How to apply?

Bidders can log in at the website of their broker or app (where they have their Demat account), select Campus Activewear IPO, enter their UPI ID, and select the investor type. The quantity should be a multiple of the lot size. If you wish to apply at the cut-off price, simply click on the checkbox next to ‘Cut-off price’. You will receive an SMS from the NPCI confirming your bid and requesting you to accept the mandate on your UPI app.

Campus Activewear IPO: Financials

In FY19, company’s revenue stood at Rs 595 crores, which went up to Rs 732 crore in FY20. However, in FY21, company’s revenue dipped to Rs 711 crore. However, company’s PAT (Profit After Tax) after in Q3FY22 stands at Rs 84.804 crore, which was at Rs 16.846 crore in Q3FY21. Campus has reported PAT of Rs 26.863 crore in Q4FY22, which stood at Rs 62.369n in Q4FY21.

Campus Activewear IPO: Should you Invest?

Anand Rathi has given ‘subscribe’ tag to the IPO. Anand Rathi report on the public issue says that investors can rely on reasonable pricing, and attractive valuation and should reckon with Campus Activewear’s operations in the fast going footwear segment.

Giving ‘buy’ tag to Campus Activewear IPO; Saurabh Joshi Research Analyst at Marwadi Financial Services said, “Considering the TTM (Dec 21) EPS of ₹3.12 on a post-issue basis, the company is going to list at a P/E of 93.72x with a market cap of Rs.88,863 mn whereas its peers namely Relaxo Footwear and Bata India Ltd are trading at PE of 103x and 357x. We assign a “Subscribe” rating to this IPO as the company is the largest sports and athleisure footwear brand having 17% market share in India by value. Also, it is available at a reasonable valuation as compared to its peers.”

Recommending ‘buy’ for long-term investors; Santosh Meena. Head of Research, Swastika Investmart Ltd said, “Campus Activewear Limited is India’s largest sports and athleisure footwear brand, it enjoys competitive advantages like integrated manufacturing facilities, strong brand recognition, robust distribution network. The company has good growth prospects, good relationships with its stockists & suppliers, a focus on in-house designing, and an enviable supply chain network. However, all the positives are priced in as the share is priced at a PE of 78.5 (annualized FY 22 earnings), and being an OFS we recommend this issue for long-term investors only.”

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