Credo Brand Marketing (Mufti) IPO: Review, Valuation & GMP

Credo Brand Marketing (Mufti) IPO - Complete Overview

Established in 1999, Credo Brands Marketing Limited is the force behind the popular men's casual clothing brand "Mufti." Originally launched in 1998, Mufti initially focused on shirts, T-shirts, and trousers. Over the past 25 years, the brand has undergone significant expansion, now boasting a diverse product range that includes sweatshirts, jeans, cargos, chinos, jackets, blazers, and sweaters. These offerings cater to various categories such as relaxed holiday casuals, authentic daily wear, urban casuals, party wear, and athleisure.

Founded by Kamal Khushlani with a vision to revolutionise men's fashion, Mufti has successfully evolved to meet the demands of customers seeking versatile clothing options. The brand's products are distributed through an extensive pan-India multichannel network, including Exclusive Brand Outlets (EBOs), Large Format Stores (LFSs), and Multi-Brand Outlets (MBOs). Additionally, Mufti's presence extends to its company-owned website and third-party e-commerce platforms. 

As of September 30, 2023, Mufti reaches customers through 1,807 touch points across 591 cities, encompassing 404 EBOs, 71 LFSs, and 1,332 MBOs.

 

Credo Brand Marketing (Mufti) IPO Overview

Mufti Menswear IPO date is slated to be open for subscription from December 19, 2023, to December 21, 2023. This BSE, NSE IPO follows a Book Built Issue IPO.

Mufti Menswear IPO price is fixed at Rs. 266 to Rs. 280 per share. The upcoming BSE, NSE IPO will be listed on December 27, 2023.

The total issue size of this IPO amounts to Rs. 549.78 CR. Within this total issue, 35% is issued to retail investors, and 15% is issued to other investors.

 

Detailed Video

 

Credo Brand Marketing (Mufti) IPO Timetable (Tentative)

Events	Date
IPO Opening Date	19 December 2023
IPO Closing Date	21 December 2023
IPO Allotment Date	22 December 2023
Refund initiation	26 December 2023
IPO Listing Date	27 December 2023

 

Credo Brand Marketing (Mufti) IPO Details

IPO opens from Dec 19 to 21, 2023, and offers shares at Rs. 266 to Rs. 280 each. The lot size is 53 shares, costing Rs. 14,840. The total issue size is 19,634,960 shares, raising Rs.549.78 crore.

IPO Opening & Closing date	19 December to 21 December 2023
Face value	Rs. 2 per Share
Issue Price	Rs. 266 to Rs. 280  per Share
Lot Size	53 Shares
Price of 1 Lot	Rs. 14,840
Total Issue Size	19,634,960 Shares (aggregating up to Rs. 549.78 CR)
Offer for Sale	19,634,960 shares of Rs. 2 (aggregating up to Rs. 549.78 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Credo Brand Marketing (Mufti) Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1 Lot	53
Maximum Lot Investment (Retail)	13 Lot	689
Minimum Lot Investment (HNI)	14 Lot	742
Maximum Lot Investment (HNI)	67 Lot	3551

 

Credo Brand Marketing (Mufti) Reservation

QIB Shares Offered	50%
Retail Shares Offered	35%
Other Shares Offered	15%

 

 

Company Financial

As of June 30, FY23, the company boasts strong financials with Rs.592.38 Crore in total assets, Rs.119.43 Crore total revenue, and a net profit after tax (PAT) of Rs.8.58 Crore. 

Period	Jun 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	592.38	574.48	476.05
Total Revenue	119.43	509.32	354.84
PAT	8.58	77.51	35.74
Net worth	289.88	281.35	235.73
Total Borrowings	11.30	10.08	13.46

 

Revenue Distribution Product-Wise

As of June 30, FY23,  Mufti Menswears revenue distribution is led by shirts (44.75%), followed by bottoms (39.04%) and T-shirts (11.70%), reflecting a diverse product mix.

(in %age)

Particulars	Jun 30, F.Y. 23	Mar 31, F.Y. 23	Mar 31, F.Y. 22
Shirt	44.75	38.38%	37.26%
Bottom	39.04	42.58%	41.38%
T-shirt	11.70	10.51%	11.36%
Outerwear	0.02	4.43%	5.73%
Miscellaneous	4.49	4.10%	4.27%
Total	100.00%	100.00%	100.00%

 

Revenue Distribution Channel-Wise

As of June 30, FY23, company revenue is primarily generated from Exclusive Brand Outlets (EBOs) at 61%, followed by Multi-Brand Outlets (MBOs) at 17.89%, indicating a strong presence in retail channels.

(in %age)

Particulars	Jun 30, F.Y. 23	Mar 31, F.Y 23	Mar 31, F.Y 22
EBOs (exclusive brand stores)	61.00%	56.79%	51.84%
MBOs (multi-brand stores)	17.89%	30.43%	32.24%
LFSs (large format stores)	2.46%	3.16%	3.36%
Online	13.95%	5.11%	8.22%
Others	4.70%	4.51%	4.35%
Total	100.00%	100.00%	100.00%

 

Revenue By Operations

Credo Brands Marketing Limited's revenue from operations for the period ending June 30, FY23, stands at Rs.1,184.90 crore, contributing to the total revenue of Rs.5,093.22 crore, which includes other operating income.

(Amount in Crores)

Particulars	Jun 30, F.Y. 23	Mar 31, F.Y 23	Mar 31, F.Y 22
Revenue from operations	1,18.49	4,98.18	34.11
Other Operating Income	94.0	11.14	13.66
Total Revenue from operations	1,19.43	5,09.32	3,54.83

 

The objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Realise the advantages of listing Equity Shares on Stock Exchanges 
• Conduct an Offer for Sale, involving up to 19,634,960 Equity Shares.

 

 

Promoters and Management of Mufti Menswear IPO

1. Kamal Khushlani.
2. Poonam Khushlani.

Pre-issue Promoter Shareholding	66.66%
Post-issue Promoter Shareholding	53.66%

 

Credo Brand Marketing (Mufti) Lead Managers

• Dam Capital Advisors Ltd
• ICICI Securities Limited
• Keynote Financial Services Ltd

 

Peers of Mufti Menswear IPO

Credo Brands Marketing Limited, with a face value of Rs. 2 per share, boasts a robust RoNW of 29.98%, a P/E ratio of 23.22, and an EPS (Basic) of Rs. 12.06, distinguishing itself from peers.

Name of the Company	Face Value (Rs.  per share)	RoNW	P/ E	EPS (Basic) (Rs.)
Credo Brands Marketing Limited	2	29.98	23.22	12.06
Aditya Birla Fashion and Retail Limited	10	-1.18	-	-0.38
Go Fashion (India) Limited	10	17.27	88.24	15.33
Arvind Fashions Limited	4	4.42	157.08	2.77
Kewal Kiran Clothing Limited	10	23.22	40.24	19.31

 

Evaluation

The IPO is priced in the range of Rs. 266 to Rs. 280 per share.

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 12.06 from the last year, the resulting P/E ratio is 23.22x.
- Taking into account the weighted EPS of Rs 7.99 for the last three years, the P/E ratio amounts to 35.05x.

Comparative Analysis with Listed Peers:

- Arvind Fashions Limited has a P/E ratio of 157.08x (the highest).
- Kewal Kiran Clothing Limited has a P/E ratio of 40.24x (the lowest).
- The industry's average P/E is 95.18x.

Consequently, the IPO Price range at a P/E of 23.22x to 35.05x is considered overvalued.

 

 

Dividend Policy

Notably, a special dividend of Rs. 50 per share was paid in the year past, while dividends were not distributed in previous fiscal years. Investors are cautioned against relying solely on past dividends. The company's dividend future decisions depend on Board and Shareholder approval, considering factors like profits, capital needs, and economic conditions.

 

IPO's Strengths

1. Brand Recognition and Diverse Offerings: "Mufti" has a strong 25-year presence in India, offering a diverse range of products in the mid-premium to premium segment, competing with brands like Jack & Jones and Levi’s.

2. Extensive Pan-India Presence: With 1,807 touchpoints, including Exclusive Brand Outlets (EBOs), Large Format Stores (LFSs), Multi-Brand Outlets (MBOs), and online sales, Mufti has a broad reach from major metros to tier-3 cities.

3. Scalable Asset-Light Model: Mufti's agile and scalable approach involves in-house design and outsourced manufacturing, ensuring efficiency and control over the supply chain.

4. Financial Stability and Growth: Demonstrating financial stability, Mufti's revenues grew from ₹3,411.72 million in Fiscal 2022 to ₹4,981.82 million in Fiscal 2023, with positive indicators like Gross Profit Margin and Return on Capital Employed (ROCE).

5. Experienced Leadership: Founded by Kamal Khushlani, Mufti is led by an experienced team with over 235 years of cumulative industry expertise, ensuring strategic planning and sustained growth.

 

IPO's Weaknesses

1. Limited Impact: While exposed to market risks like interest rate, liquidity, currency, price, foreign currency, credit, and reputational risks, there are no significant material market risks affecting the company's financial position.

2. High Concentration: The concentration of credit risk in relation to trade receivables is high, necessitating continuous monitoring and management through credit approvals and establishing limits.

3. Insignificant Influence: The company faces no material price risk that could significantly impact its future performance.

4. Limited Exposure: The company is principally exposed to foreign currency risk against USD, but the sensitivity analysis indicates minimal impact on profit or equity from a 10% change in exchange rates.

5. Controlled Liquidity Risk: The company manages liquidity risk by maintaining sufficient cash, cash equivalents, and credit facilities. It monitors rolling forecasts of liquidity positions and ensures a balance between assets and liabilities.

 

IPO GMP Today

The last GMP of Credo Brands Marketing Limited  (Mufti Menswear IPO) was Rs.80.

 

Conclusion

Credo Brands Marketing Limited, the force behind "Mufti" menswear, is launching its IPO from December 19 to December 21, 2023. The IPO details include an issue price of Rs. 266 to Rs. 280 per share, a lot size of 53 shares, and a total issue size of 19,634,960 shares, amounting to Rs.549.78 crore. While the company exhibits strengths in brand recognition and extensive reach, investors should carefully assess the risks and valuations before deciding.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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