Please refer to important disclosures at the end of this report
1
Campus Activewear Limited (CAL)
was incorporated on 2008. Campus is the
largest sports and athleisure footwear brand in India, both in terms of value
and volume in Fiscal 2021. The company manufactures and distributes a
variety of footwear like Running Shoes, Walking Shoes, Casual Shoes
,
Floaters, Slippers, Flip Flops and Sandals, available in multiple colours, styles
and at affordable prices. Campus Activewear sells its products through online
platforms and offline stores. Campus Activewear Limited has a pan-
India
trade distribution net
work, with over 425+ distributors in 28 states and 664
cities. The company also has 19,200 retailers across India on December 31,
2021.
an installed annual capacity for assembly of 28.80
million pairs as on
December 31, 2021.
Positives: (a)
India’s largest and fastest growing sports and athleisure footwear
brand (b
) Strong brand recognition, innovative branding and marketing
approach (c) Robust Omni-channel sales and distribution network with pan-
India
presence and move to premium category (d)
Experienced Board and senior
management team.
Investment concerns: (a) Increase in competition (b) Slowdown in the economy
could impact the overall revenue of the company.
Outlook & Valuation: In terms of valuations, the post-
issue TTM P/E works out
to 93.4x (at the upper end of the issue price band), which is high considering
Company’s negative PAT CAGR of ~17 % over FY19-21. However, CA
L has
strong brands and wide range of products but we believe that these positives are
captured in the valuations commanded by the company.
Thus, we have a
NEUTRAL rating on the issue.
Exhibit 1: Key Financials
Y/E March (₹ cr)
FY2019 FY2020 FY2021 9MFY22
Net Sales
595
732
711
842
% chg
23.1
(2.8)
93.0
Net Profit
38
62
27
86
% chg
60.4
(56.4)
407.5
OPM (%)
16.8
18.6
16.3
19.4
EPS (Rs)
1.3
2.0
0.9
2.8
P/E (x)
231.4
144.3
330.7
P/BV (x)
44.0
31.2
28.4
RoE (%)
19.1
21.9
8.6
RoCE (%)
21.4
20.2
17.0
EV/Sales (x)
15.3
12.4
12.7
-
EV/EBITDA (x)
90.8
66.8
78.1
-
Angel Research; Note: Valuation ratios based on post-issue shares and at ₹292 per share.
NEUTRAL
Issue Open: April 26, 2022
Issue Close: April 28, 2022
QIBs 50%
Non-Institutional 15%
Retail 35%
Promoters 74.1%
Public 25.9%
Offer for sale:
`1,400cr
Issue Details
Face Value:
`5
Present Eq. Paid up Capital:
`152cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital:
`152
cr
Issue size (amount):
`1,400cr
Price Band:
`278
-292
Lot Size: 51 shares
Post-issue mkt.cap:
`8,460
*– 8,886cr**
Promoter holding Pre-Issue: 78.2%
Promoter holding Post-Issue: 74.1%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Amarjeet S Maurya
Amarjeet.maurya@angelbroking.com
+022 4000 3600, Extn: 6810
Campus Activewear Limited IPO
IPO Note |
Footwear
April 22
, 2022
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
2
Company background
Campus Activewear Limited was incorporated on 2008. Campus is the largest
sports and athleisure footwear brand in India, both in terms of value and volume
in Fiscal 2021.
The company manufactures and distributes a variety of footwear like Running
Shoes, Walking Shoes, Casual Shoes, Floaters, Slippers, Flip Flops and Sandals,
available in multiple colours, styles and at affordable prices. Campus Activewear
sells its products through online platforms and offline stores.
Campus Activewear Limited has a pan-India trade distribution network, with
over 425+ distributors in 28 states and 664 cities. The company also has
19,200 retailers across India on December 31, 2021.
Campus own and operates 5 manufacturing facilities across India with an
installed annual capacity for assembly of 28.80 million pairs as on December
31, 2021.
Issue details
CAL is raising ₹1,400cr through OFS in the price band of ₹278-₹292 per share.
Exhibit 1: Pre and post IPO shareholding pattern
No of shares (Pre-issue) % (Post-issue) %
Promoter
23,80,09,004 78.2% 22,55,09,004 74.1%
Public
6,63,17,000 21.8% 7,88,17,000 25.9%
Total
30,43,26,004 100.00% 30,43,26,004 100.00%
Source: Source: RHP, Note: Calculated on upper price band
Objectives of the Offer
The company is coming with this IPO mainly due to two reason (1) To
carry out an offer for sale and (2) To achieve the benefits of listing the
Equity Shares on the stock exchanges.
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
3
Consolidated Profit & Loss Statement
Y/E March (₹ cr)
FY2019 FY2020 FY2021 9M FY22
Net Sales
595
732
711
842
% chg
23.1
(2.8)
93.0
Total Expenditure
495
596
595
679
Raw Material
321
380
374
416
Personnel
43
57
55
48
Others Expenses
130
159
166
215
EBITDA
100
136
116
163
% chg
36.2
(14.9)
220.0
(% of Net Sales)
16.8
18.6
16.3
19.4
Depreciation& Amortisation
14
23
33
38
EBIT
86
113
83
125
% chg
32.1
(26.4)
328.8
(% of Net Sales)
14.4
15.5
11.7
14.9
Interest & other Charges
21
17
17
14
Other Income
2
2
4
2
(% of PBT)
2.7
2.1
5.4
1.8
Recurring PBT
66
99
70
114
% chg
48.9
(29.2)
479.2
Tax
28
36
43
29
(% of PBT)
41.8
36.8
61.6
25.6
PAT
39
62
27
85
Basic EPS (₹)
1.3
2.0
0.9
2.8
% chg
60.4
(56.4)
407.5
Source: Company, Angel Research
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
4
Consolidated Balance Sheet
Y/E March (` cr) FY2019 FY2020 FY2021
SOURCES OF FUNDS
Equity Share Capital
0
152
152
Reserves& Surplus
202
133
161
Shareholders’ Funds
202
285
313
Total Loans
199
276
177
Deferred Tax Liability
3
6
6
Total Liabilities
401
567
496
APPLICATION OF FUNDS
Net Block
100
169
256
Capital Work-in-Progress
25
35
0
Investments - - -
Current Assets
318
458
395
Inventories
119
173
207
Sundry Debtors
162
144
98
Cash
2
60
1
Loans & Advances
31
57
81
Other Assets
4
23
8
Current liabilities
105
155
193
Net Current Assets
213
303
202
Deferred Tax Asset
63
60
37
Total Assets
401
567
496
Source: Company, Angel Research
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
5
Consolidated Cash Flow Statement
Y/E March (` cr) FY2019 FY2020
FY2021
Profit before tax
66
99
70
Depreciation
14
23
33
Change in Working Capital (48) (18)
21
Interest / Dividend (Net)
21
16
16
Direct taxes paid (9) (40)
(25)
Others
10
19
10
Cash Flow from Operations
54
99
124
(Inc.)/ Dec. in Fixed Assets (29) (110)
(55)
(Inc.)/ Dec. in Investments
0
(45)
46
Cash Flow from Investing (29) (155)
(9)
Issue of Equity
0
20
0
Inc./(Dec.) in loans
13
52
11
Dividend Paid (Incl. Tax)
0
0
0
Interest / Dividend (Net) (39) (3)
(140)
Cash Flow from Financing (26)
69
(129)
Inc./(Dec.) in Cash
0
14
(14)
Opening Cash balances
2
2
15
Closing Cash balances
2
15
1
Source: Company, Angel Research
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
6
Key Ratios
Y/E March FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
231.1
144.0
330.2
P/CEPS
167.5
103.8
148.9
P/BV
44.0
31.1
28.4
EV/Sales
15.2
12.4
12.7
EV/EBITDA
104.5
89.0
105.1
EV / Total Assets
22.6
16.0
18.2
Per Share Data (Rs)
EPS (Basic)
1.3
2.0
0.9
EPS (fully diluted)
1.3
2.0
0.9
Cash EPS
1.7
2.8
2.0
Book Value
6.6
9.4
10.3
Returns (%)
ROCE
18.1
14.1
10.9
Angel ROIC (Pre-tax)
18.1
15.8
10.9
ROE
19.1
21.9
8.6
Turnover ratios (x)
Asset Turnover (Net Block)
5.9
4.3
2.8
Inventory / Sales (days)
73
86
106
Receivables (days)
99
72
50
Payables (days)
53
62
88
Working capital cycle (ex-cash) (days)
120
96
69
Source: Company, Angel Research
Campus Activewear Ltd| IPO Note
April
2
2
, 2022
7
Research Team Tel: 022 - 40003600 E-mail: research@angelbroking.com Website: www.angelone.in
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