Khadim India Limited IPO Details and Review

November 1, 2017

About Khadim India Limited
Business Operations of Khadim India Limited
Key Strengths of Khadim India Limited
Promoters of Khadim India Limited
Financial Highlights or Financial Performance of Khadim India Limited
Khadim India Limited IPO Details
Objective of IPO
Risks for investors in Khadim India Limited IPO

About Khadim India Limited

In December 1981, Khadim India Limited was established as S.N. Footwear Industries Private limited. It is a private limited company involved in whole-selling and distribution of branded basic utility footwear. In 1993, Khadim was recognized as one of the leading footwear retailers in India. Khadim’s has 853 branded exclusive retail store outlets as on 31st March 2017 in 23 states and 1 union territory of India.

Khadim India’s business motive is “Fashion for everyone”. Under this motive, Khadim has managed to create a brand image of ‘affordable fashion brand’ for male, female and kid i.e. entire family for every occasion. Khadim has a huge network of 377 distributors as on 30th June 2017 under its business vertical of Indian Distribution. Khadim India Limited is also into the business of institutional sales along with exports of footwear in multiple countries.

khadim-india-ltd

Khadim has 9 sub-brands such as British Walkers, Lazard, Cleo, Sharon and Softouch. These nine sub-brands of Khadim brought sales of INR 256 Crore as of 31st March 2017.

Khadim India Ltd is a second largest footwear brands with direct focus on retail and distribution business for high quality footwear. Khadim as a brand has a largest presence in Eastern India and one of the top three players in Southern region of India as on Financial Year 2016. Khadim is also prominently known for its massive footwear retail franchise network in India in Financial Year 2016.

Key Strengths of Khadim India Limited

• A strong brand image and leading footwear brand among Indian citizens since 3 decades.
• A network of 9 sub-brands with strong design capabilities that allows Khadim to keep its seasonal designs updated.
• Strong retail and distribution network across India with greater penetration to Tier 1 as well as Tier 3 cities.
• Asset light business model that give higher operating leverage to Khadim India Limited.
• Khadim India Limited is strongly targeting to enhance its geographical footprint for deeper market penetration in Northern and Southern India.
• Khadim India Limited is also introducing premium products for increase in gross margins and average selling price.

Promoters of Khadim India Limited

The promoters of Khadim India Limited IPO are Siddhartha Roy Burman and Knightsville Private Limited which is the holding company of Khadim India Limited.

Financial Performance of Khadim India

The following table gives a summary of key financial highlights of Khadim India Limited over the period of 2015 – 2017.

Khadim-India

The above table illustrates increase in Total Asset over the period 2015 to 2017 where the Total Revenue also significantly increases over the same period of years. It is also observed that and Profit after tax has a good increase over the time period 2015 to 2017.

Khadim India Limited IPO Details

Objective of IPO –Khadim India Limited shall not get any proceeds from the offer as company shall get all the proceeds by selling shareholders .The objective of Khadim India Limited are following –
1. The company aim to complete the prepayment or scheduled repayment of total or the fraction of term loans and working capital facilities.
2. Also the company plans for general corporate investment purpose.

Issue Open Dates2nd November, 2017 (Thursday) – 6th November, 2017 (Monday)
Face ValueRs 10 per Equity Share
Issue PriceRs 745 – Rs 750 per Equity share
Market Lot Size20 Shares
1 Lot Investment RangeRs. 14,900 – Rs. 15,000
Listing atBSE , NSE
Type of the IssueBook Built Issue IPO
Size of Issue• Fresh Issue of Equity Shares of Rs 10 aggregating up to Rs 50.00 Cr
• Offer for Sale of 6,574,093 Equity Shares of Rs 10
Key Business Segments for RevenueWholesaling and distribution of branded basic utility footwear
Promoter of Khadim India Ltd.Siddhartha Roy Burman and Knightsville Private Limited.
Finalization of Basis of Allotment (Tentative)10th November, 2017
Initiation of Refunds (Tentative)13th November, 2017
Credit of Shares to DEMAT Account (Tentative)13th November, 2017
Commencement of Trading (Tentative)14th November, 2017

Risks for investors in Khadim India Limited

Following are some the risks stated by the brokerage houses –

• Khadim India Limited has a business model of franchise base for point of sales contact. Hence reliability on Franchisers is high which might impact the business operations.
• Khadim’s business is dependent on geographical markets hence the risk associated to existing geographical market as well as new penetration can be high.
• Procurement of raw material, shortage of raw material particularly leather can also impact the business operation of Khadim India Limited.

Should We invest in this Khadim India IPO

Financial year 2017 EPS is around Rs.17.78 On a upper price band of Rs.750 PE ratio is 42X. Its listed other peers liberty shoes is trading PE ratio of 68X and Bataindia is at PE ratio of 60X. Hence this Khadim IPO is reasonably valued. So we recommenced to buy this issue.

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