SP Apparels’ IPO oversubscribed

SP Apparels’ IPO which opened on Aug 2 has been oversubscribed 3 times. The IPO has received bids for 1,74,05,300 shares against the total issue size of 65,56,605 shares. The portion set aside for Qualified Institutional Buyers (QIBs) was oversubscribed 2.21 times and the one for non-institutional investors by 5.1 times. Retail investors category was also oversubscribed 1.87 times. Company plans to raise Rs 239 crores. The price band is fixed at Rs 258-268 for an equity share of Rs 10 face value. 

The company intends to use the fresh funds to repay debt, expand and modernise the manufacturing facility at Vazhapadi (Salem, Tamil Nadu), open new stores for the sales of its in-house ‘Crocodile’ brand and add balancing machineries for the existing dyeing unit at SIPCOT, Perundurai. Motilal Oswal Investment Advisors Pvt. Ltd., and Centrum Capital are the merchant bankers to the issue. 

For the year ended March 31, 2016, SP Apparels has reported a net profit of Rs 48.12 crore against Rs 25.49 crore a year ago. In the financial years 2011-12, 2012-13 and 2013-14, the company has reported net profit of Rs 6.82 crore, 5.22 crore and 12.56 crore, respectively. As of March 31, 2016, total debt of the company stands at Rs 259.36 crore comprising of long-term borrowings, short-term borrowings and current maturities of long-term borrowings.

Company is the leading manufacturer and exporter of knitted garments for infants and children in India. Company also manufactures menswear garments in India under the brand ‘Crocodile’.