InvestorQ : Can you tell me about the forthcoming IPO of Campus Shoes? Is this the same as Action Shoes?
vaishnavi mhatre made post

Can you tell me about the forthcoming IPO of Campus Shoes? Is this the same as Action Shoes?

vidhya Laxmi answered.
5 months ago

Firstly, it is not the same but both are from the same group, The group had launched Action Shoes as its first product back in 1983 but had later shifted focus to sports and active wear and had rechristened the brand name as Campus Activewear to better reflect the sporty focus and the young crowd that it was targeting. So that is the story of how Action Shoes became Campus Activewear over a period of time and that is how it has been for 25 years.

Now for the IPO story. Campus Activewear will shortly file for a Rs.1,800 crore IPO, which will be entirely by way of an offer for sale or OFS. It plans to sell nearly 16% of its capital in the OFS. The break up is as under. Out of the 16% on offer, TPG (an early PE investor) will offer 10% in the OFS, promoters will offer 4% while QRG Enterprises (belonging to the family office of Havells group of Delhi) will sell 2%.

The OFS is expected to target an indicative valuation of $1.5 billion for the company or approximately Rs.11,400 crore at the current prevailing average exchange rates. It will offer 16% equity as part of the OFS for an approximate value of Rs.1,800 crore. It does not plan to make any fresh issue as the sole purpose is to list the issue and to get the benefits of listing like the ability to use stock as a currency. It will also give partial exit to early investors.

Out of the total Indian footwear market of Rs.60,000 crore, the sports and leisure shoes segment is estimated at approximately Rs.10,000 crore. If you look at the specific sports segment, Reebok is the market leader with 45% market share while Campus Activewear is the second largest with a market share of 15%. At the higher end, there are also players like Adidas, Nike and Puma who focus on the premium sportswear segment.

The potential for footwear in the Indian context is huge. One way to look at the opportunity is through per capita consumption of footwear. In the Indian context, the per capita consumption of footwear stands at a low of 1.66 per year while the global average is 3 with the developed markets boasting of an average of 7. India also has the potential to become a preferred outsourced manufacturer considering it has 13% of the global output share.

For FY-21, Campus Activewear had total revenues of Rs.721 crore and EBITDA of Rs.117 crore, although the numbers were depressed due to the lag effect of COVID-19.