SD Retail Ltd IPO: Review, Valuation, Date & GMP

SD Retail IPO-Complete Overview

SD Retail IPO an SME IPO is a book-built issue of Rs.64.98 crore by SD Retail Ltd. that was established in May 2004. Under the "SWEET DREAMS" brand, S D Retail Limited designs, manufactures, outsources, distributes, and retails sleepwear.

In honor of the change from work to home life, SWEET DREAMS provides chic and cosy sleepwear for the whole family. The company offers fits appropriate for a range of body types in its goods, which are designed for men, women, and children aged 2-16.

Through distributors, exclusive brand outlets (EBOs), multi-brand outlets (MBOs), and e-commerce sites including Myntra, AJIO, Nykaa, Flipkart, Amazon, and its own website, the company sold its goods both domestically and abroad as of February 29, 2024.

The company uses an asset-light business model. It does not own any of the real estate on which its retail locations are situated, but it manages every facet of its sales operations. This model of asset lightness permits scalability and makes it easier to create Exclusive Brand Outlets (EBOs) quickly.

This new SME IPO will open for subscription on 20 September 2024, and its ‘initial public offering’ will end on 24 September 2024. 

SD Retail IPO Overview

The Rs.64.98 crore SD Retail Limited IPO consists of an entirely fresh issue of 49.6 lac Shares. This SME IPO date is from September 20-September 24, 2024. The IPO listing date is Friday, September 27, 2024, on NSE and SME. The SD Retail IPO price band is Rs.124 to Rs.131 for each Share.The IPO with a Face Value of Rs.10 per Share offers a total issue size of 4,960,000 Shares (aggregating up to Rs.64.98 Cr.).

 

To open a demat account and apply for the IPO, Click Here.

Company Financial

The company's revenue grew by 20% and PAT increased by 77% between the FYs ended  March 31, 2024 and March 31, 2023.

(Amount in lac)

 

Revenue Bifurcation

The revenue bifurcation for various activities is shown below:

(Amount in lac)

 

Channel-wise Revenue Breakdown During The Last Three Fiscals 

(Amount in lac)

 

Sales-wise Revenue Breakdown During The Last Three Fiscals 

(Amount in lac)

 

Product-wise Revenue Breakdown During The Last Three Fiscals 

(Amount in lac)

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• The Company will need to invest capital to establish new exclusive brand outlets, or "EBOs."

• Required Funding for Working Capital

• General corporate purposes.

 

Peers of SD Retail Ltd. 

 

Evaluation

SD Retail IPO price is Rs.124 to Rs.131 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.5.52 from the last year, the resulting P/E ratio is 23.73.

Considering the weighted EPS of Rs.5.03 for the last three years, the P/E ratio is 26.04. Note: The basic EPS of the peers is for the financial year ending 31 March 2024.

The peers' P/E Ratio is computed based on the closing market price of the Share as of 31 March 2024. 

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 42.16x.

 

 

In simple words, the P/E ratio of SD Retail logo IPO (23.73x), compared with the industry’s average P/E of 42.16x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths

• Pan-Indian distribution network with many channels and increased emphasis on EBOs

• Internal product development and design knowledge

• Robust unit economics and a light-weight, scalable asset model

• Modular Business Plan

• Stability of the organization combined with managerial proficiency

• Current clientele and their level of satisfaction

• Gender-neutral and family-friendly, this sleepwear brand has a distinct standing in the market.

 

IPO’s Weaknesses

• Its goods are offered for sale under the "SWEET DREAMS" brand. Any failure to sell its items well or a decline in the public's opinion of its brand could reduce customer traffic, which would harm its operations, cash flows, and financial health.

• Since the main focus of the business is the selling of women's sleepwear, demand fluctuations and shifts in customer preferences could negatively impact the operations, financial situation, and overall business performance.

• Negative Cash Flows of the company in various activities in the previous fiscal years is a negative point for the company.

• Operates in fiercely competitive marketplaces across all of its product categories through offline and online channels, and a lack of ability to successfully compete could harm the company.

 

SD Retail IPO GMP Today

SD Retail IPO GMP today is Rs.25 as of 18 September 2024. With a price band of Rs.131, the SD Retail IPO listing price is Rs.156 (expected listing price).

19.08% is the anticipated percentage gain or loss per share.

IPO Timetable (Tentative)

The SD Retail logo IPO is from September 20 to September 24, 2024, with allotment on September 25, refund initiation on September 26, and the IPO listing date on September 27, 2024.

 

SD Retail IPO Details 

 

SD Retail IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (1000 Shares) amounting to Rs.1,31,000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (2000 Shares) amounting to Rs.2,62,000.

 

SD Retail IPO Reservation

 

Promoters And Management of SD Retail Ltd.

• Mr. Hitesh Pravinchandra Ruparelia

• Mr. Utpalbhai Pravinchandra Ruparelia

• M/s. Sweet Dreams Loungewear (India) LLP (Formerly known as Sweet Dreams Loungewear (India) Private Limited) 

• M/s. Grace Garments LLP

 

IPO Lead Managers

• Beeline Capital Advisors Pvt Ltd.

Dividend Policy

The company has not paid any dividends in the last three fiscals.

Conclusion

In the most recent fiscal years, the company's operating and investing operations resulted in negative cash flow. The company is currently launching an IPO for the general public to accomplish its goals. 

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.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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