Credo Brands Marketing Ltd IPO

The IPO opens on 19 Dec 2023 & closes on 21 Dec 2023.

Credo Brands Marketing Ltd was incorporated as a private limited company in the name of Credo Brands Marketing Private Limited' in Mumbai, India dated April 29, 1999, issued by the RoC. Subsequently, the Company was converted from a private limited company to a public limited company dated May 11, 2023, consequent to which a fresh certificate of incorporation was issued by the RoC to Company and the name of Company was changed to Credo Brands Marketing Limited'. Credo Brands are among the largest homegrown brands in the mid-premium and premium men's casual wear market. The Company is mainly engaged in the business of selling of fashion casual garments and accessories under the brand name 'Mufti'. Their products are designed to provide a youthful appearance while keeping up with ongoing fashion trends. The Company has been providing a a wide range of products for multiple occasions in a customer's life, with their product offerings ranging from Shirts to T-Shirts to jeans to chinos to jackets, which caters to all year-round clothing. The product mix has evolved significantly over the past several years from consisting of only shirts and trousers in the year 1998 to a wide range of products including T-Shirts, sweatshirts, jeans, cargos, chinos, jackets, blazersand sweaters in relaxed holiday casuals, authentic daily casuals to urban casuals, party wear and also athleisure categories. Their product's main competitors, in the similar price brackets, are brands such as Jack & Jones, Levi's, Pepe Jeans and U.S. Polo Assn. In 1998, the Company launched the brand 'Mufti'; the brand was purchased by Company from proprietary concern of Kamal Khushlani in 2003. It launched 'Muftisphere' in year 2014, to provide benefits to customers into shopping. The Company opened its 100th store in 2010; 200th store in 2013; opened 300th store in 2019 and thereafter, 350th store in 2022. As of March 31, 2023, the Company had a network of 45 fabric and accessories suppliers and over 45 manufacturing partners with the top five suppliers. The Company is planning up to 19,634,960 Equity Shares through Offer for Sale.

Credo Brands Marketing Ltd IPO will close on 21 Dec 2023.

<ul><li>Strong brand equity with presence across categories.</li><li>Multi-channel pan-India distribution network.</li><li>Scalable asset light model.</li><li>Strong in-house design competencies to deliver innovative and high-quality products with end-to-end tech-enabled supply chain capabilities</li><li>Financially stable business model.</li><li>Experienced Promoter and senior management team.</li></ul>

<table class="table"> <thead> <tr> <th>S.No</th> <th>Promoters Name</th> <th>Pre Issue Shares</th> <th>Pre Issue Percentage</th> <th>Post Issue Shares</th> <th>Post Issue Percentage</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Kamal Khushlani</td> <td>22260420</td> <td>33.53</td> <td>18120420</td> <td>27.3</td> </tr> <tr> <td>2</td> <td>Poonam Khushlani</td> <td>18164380</td> <td>27.37</td> <td>13889380</td> <td>20.92</td> </tr> </tbody> </table>

<ul><li>The company' business is primarily concentrated on the sale of men's casual western wear and is vulnerable to variations in demand and changes in consumer preferences which could have an adverse effect on its business, results of operations and financial condition.</li><li>All the products are sold under a single brand, ufti'. Any inability to effectively market the company products, or any deterioration in public perception of its brand, could affect consumer footfall and consequently adversely impact the business, financial condition, cash flows and results of operations.</li><li>The company's inability to grow the business across emerging markets in India and effectively manage or expand its retail network may adversely impact the company business, results of operations and financial condition.</li><li>While the company design the products in-house, its relies on outsourcing the manufacturing of finished products to third-party manufacturing partners, without exclusivity arrangements. Any inability to obtain sufficient quantities of apparel of the requisite quality in a timely manner and at acceptable prices, or a slowdown, shutdown or disruption in such thirdparty manufacturing partners' operations and performance, could adversely affect the company business, cash flows, results of operations and financial condition.</li><li>The company's business is subject to seasonality. Lower sales and revenue may adversely affect its business, financial condition, and results of operations.</li><li>The company may not be able to procure sufficient quantity or quality of products from third party raw material suppliers in a timely manner and at an acceptable price and this may adversely affect the business, results of operations and financial conditions.</li><li>The company is dependent on third party manufacturing partners for the finished products. Its may not be able to procure sufficient quantity or quality of finished goods from the manufacturing partners in a timely manner and at an acceptable price and this may adversely affect the business, results of operations and financial conditions.</li><li>Its business depends on continual purchases of the products and timely payments by its franchise stores, both in short and long term. Any delay or failure in sale of products or payments at the franchise stores or any disputes with franchisees may adversely impact its business, cash flows and results of operations.</li><li>The company operate in highly competitive markets in each of the product segments in both offline and online channels and an inability to compete effectively may adversely affect its business, results of operations and financial condition.</li><li>Pricing pressure from the competitors may affect its ability to maintain or increase the product prices and, in turn, the company revenue from product sale, gross margin and profitability, which may materially and adversely affect its business, cash flows, results of operations and financial condition.</li><li>The company does not have any definitive agreements with its manufacturing partners and third-party suppliers for the supply of the raw materials, merchandise and apparels. Further, the company do not have fixed terms of trade with majority of the manufacturing partners or third-party suppliers for supply of products.</li><li>The company has incurred indebtedness and an inability to comply with repayment and other covenants in the financial arrangements could adversely affect its business and financial condition. Further, certain of the financial agreements involve variable interest rates and an increase in interest rates may adversely affect the company results of operations and financial condition.</li><li>Failure in complying with quality control processes may have an adverse impact on its business, results of operations and financial conditions.</li><li>If the company is unable to raise additional capital, either through equity or debt, its business prospects could be adversely affected.</li><li>Any downgrade in its credit ratings could increase the borrowing costs, affect the company ability to obtain financing, and adversely affect its business, results of operations and financial condition.</li><li>The company may be unable to adequately obtain, maintain, protect, and enforce its intellectual property rights including 'Mufti', and inability to protect or use the intellectual property rights may adversely affect its reputation, business and operations.</li><li>The compnay is exposed to the risks associated with leasing real estate in case the current location of the exclusive brand outlets ("EBOs"), warehouse and the Registered and Corporate Office become unattractive or in case the ompany is unable to comply with the terms and conditions of the lease agreements then its may shift to the EBOs new locations, which may adversely affect the company business, cash flows, results of operations and financial condition.</li><li>The company has warehouses at Bengaluru, Karnataka and Mumbai, Maharashtra and majority of the manufacturing partners are situated in Karnataka and Tamil Nadu which may expose its supply chain to regional risks, which may adversely affect the company business, cash flows, financial condition and results of operations.</li><li>The company may be subject to fraud, theft or such similar incidents which may have an adverse effect on its business operations and financial conditions.</li><li>The company relies on third-party transportation providers for the transportation of the finished products and any disruption in such delivery or failure by third parties in transporting the products may adversely affect its operations.</li><li>For ensuring success of the business, consistency and quality in customer service is critical which depends on its ability to recruit and retain skilled personnel. Any failure in this respect could materially and adversely impact the company business, financial conditions, cash flows and results of operations.</li><li>The company engage contract labourers at its warehouse and any failure by the vendors from whom such contract labourers are engaged to pay wages or dues on time could subject it to financial liability, in turn adversely impacting the company profitability and results of operations.</li><li>The company is subject to payment-related risks, including risks associated with cash payments, online payment mechanisms and payment processing risks.</li><li>The company insurance policies may not be adequate or sufficient to cover the losses if the company incur huge losses or liabilities that significantly exceed its insurance coverage.</li><li>Its may suffer from labour shortages, strikes, slowdowns, work stoppages and increased wage costs by the employees, manufacturing partners and third-party suppliers or any other kind of disputes with its employees.</li><li>The company sell the products through online e-commerce platforms on a fixed-margin model and therefore, cannot control the pricing strategies employed by such e-commerce platforms to entice customers.</li><li>The growth of online retail platforms and current trends of discounts and price strategies may adversely affect its pricing ability, which may have an adverse effect on the company results of operations and financial condition.</li><li>If the company launch any new products which are not successful in the market as its anticipate, the company business, cash flows, results of operations and financial condition may be adversely affected.</li><li>If The company is unable to protect the data related to electronic mode of payments, or any other personal information that its collect from customers, the company brand reputation could be significantly harmed.</li><li>The company's inability to adapt with new technologies in the operations or technology failures or breach of data security could disrupt the operations and may adversely affect the company business and results of operations.</li><li>The Company being in the retail sector requires significant amount of working capital for a continued growth. The company inability to meet its working capital requirements may have an adverse effect on the company results of operations.</li><li>The company has contingent liabilities that have not been provided for and commitments in the financial statements, which if materialize, may adversely affect its financial condition.</li><li>The company Statutory Auditors have included an emphasis of matter in connection with the financial year ended March 31, 2021 in their examination report on the Restated Consolidated Financial Information and have included certain remarks in connection with the Companies (Auditor's Report) Order, 2020 in their audit report on standalone financial statements of the Company for the financial year ended March 31, 2023.</li><li>The company has delayed payments of certain statutory dues and have also paid interest and fees towards such delayed payments.</li><li>The COVID-19 pandemic has had an adverse effect and any future pandemic may have adverse effects on its business, results of operations, financial condition and cash flows.</li></ul>

The Issue type of Credo Brands Marketing Ltd is Book Building.

The minimum application for shares of Credo Brands Marketing Ltd is 53.

The total shares issue of Credo Brands Marketing Ltd is 19634960.

Initial public offer of 19,634,960* equity shares of face value of Rs. 2 each ("Equity Shares") of Credo Brands Marketing Limited (the "Company" or "Issuer") for cash at a price of Rs. 280 per equity share (including a share premium of Rs. 278 per equity share) (the "Offer Price") aggregating to Rs. 549.78* crores ("Offer") comprising an offer for sale of 4,140,000* equity shares aggregating to Rs. 115.92* crores by Kamal Khushlani and 4,275,000* equity shares aggregating to Rs. 119.70* crores by Poonam Khushlani (together the "Promoter Selling Shareholders"), 108,000* equity shares aggregating to Rs. 3.02* crores by Sonakshi Khushlani and 108,000* equity shares aggregating to Rs. 3.02* crores by Andrew Khushlani (together the "Promoter Group Selling Shareholders"), 2,032,260* equity shares aggregating to Rs. 56.90* crores by Concept Communication Limited, 5,031,260* equity shares aggregating to Rs. 140.88* crores by Bela Properties Private Limited, 1,970,220* equity shares aggregating to Rs. 55.17* crores by Jay Milan Mehta and 1,970,220* equity shares aggregating to Rs. 55.17* crores by Sagar Milan Mehta (together the "Other Selling Shareholders" along with the promoter selling shareholders and promoter group selling shareholders is collectively reffered to as the "Selling Shareholders") ("Offer for Sale" and such equity shares, the "Offered Shares"). The offer constitutes 30.54% of the post-offer paid-up equity share capital of the company. The face value of the equity shares is Rs 2 each and the offer price is 140 times the face value of the equity shares. *Subject to finalization of the basis of allotment