Sai Silks sets Rs 210-222 per share price band for Rs 1,201 crore IPO

Ethnic apparel retailer Sai Silks (Kalamandir) on Thursday fixed a price band of Rs 210-222 per share for its Rs 1,201 crore-initial share sale, which opens on September 20.

At the upper end of the price band, the Initial Public Offering (IPO) will fetch about Rs 1,201 crore.

The Hyderabad-based company was founded by Prasad Chalavadi, a techie turned entrepreneur in 2005.

The offer consists of Rs 600 crore of fresh issue and an equal amount of Offer For Sale (OFS) through which the promoter family will divest 30 per cent of their 95.5 per cent shareholding, Chalavadi told PTI.

The remaining 4.5 per cent of the bootstrapped ethnic retailer of premium and mid-income women's wear primarily sarees, are with the employees, he added.

At Rs 210 a share price band, the floor price 105 times and the cap price is 111 times the face value of the shares.

The OFS comprises promoters and some of the employers selling up to 2.70 crore equity shares.

The selling promoters are Nagakanaka Durga Prasad Chalavadi, Jhansi Rani Chalavadi, Dhanalakshmi Perumalla, Doodeswara Kanaka Durgarao Chalavadi, Kalyan Srinivas Annam, Subash Chandra Mohan Annam and Venkata Rajesh Annam.

Post issue, the promoters will hold 60 per cent of equity in the company, which has 54 showrooms across Telangana, Andhra Pradesh, Karnataka and Tamil Nadu.

Chalavadi said a portion of the IPO proceeds will be used to open 30 more stores in Tamil Nadu, which is its focus market now. Each store on average will involve around Rs 2.5 crore of capex, leading to an outgo of Rs 125 crore.

Half of the issue has been reserved for qualified institutional buyers, 15 per cent for non-institutional investors, and the remaining 35 per cent for retail investors. Out of the QIB portion, up to 60 per cent of the portion is set aside for anchor investors.

In fiscal 2023, Sai Silks reported revenues of Rs 1,351 crore with a net profit of Rs 97.6 crore.