Apparel manufacturing and retail company Koutons Retail India Limited announced its intention to enter the capital market on September 18, 2007, with a public issue of 3,524,439 equity shares of Rs 10 each, through the 100 per cent book-building process.
The issue consists of a fresh issue of 2,607,897 equity shares and an offer for sale of 916,542 equity shares by DPS Kohli, BS Sawhney and GS Sawhney. To close on September 21, 2007, the price band has been fixed at Rs 370 to Rs 415 per equity share. Up to 50,000 equity shares will be reserved in the issue for subscription by eligible employees.
JM Financial Consultants Private Limited is the book running lead manager and Karvy Investor Services is the co-book running lead manager to the issue. The equity shares are proposed to be listed on BSE and NSE.
Koutons Retail India Limited says it will utilise the net proceeds of the issue to fund its plan for setting up of exclusive brand outlets (EBOs), establishing a new integrated manufacturing facility, purchasing plant and machinery to increase the finishing and manufacturing capacity, improvement of its information and technology network, and general corporate purposes.
The company proposes to open 140 EBOs for its brands Koutons and Charlie Outlaw in the next two years. The planned EBOs will be company-leased and will be either company-operated or franchisee-operated. At present, the company has a network of 999 exclusive brand outlets across India.
Koutons Retail intends to set up a new manufacturing facility in Gurgaon, Haryana. It has been allotted approximately 13,000 square metres of land on a freehold basis by Haryana Urban Development Authority. The company has already increased its annual finishing and manufacturing capacity from 3,000,000 and 600,000 pieces of apparel, respectively, to 22,920,000 and 12,360,000 pieces.
Sales from the Koutons brand has increased from Rs 516.32 million in fiscal 2005 to Rs 3,726.91 million in fiscal 2007; and has contributed 99.11 per cent and 92.34 per cent of its total income in fiscal 2006 and 2007, respectively. The company has recently reinvented and re-launched its old premier brand Charlie as Charlie Outlaw.
The company’s restated total income and profit after tax were Rs 4036.17 million and Rs 344.87 million, respectively, for the year ended March 31, 2007, compared to Rs 1583.85 million and Rs 131.98 million, respectively, for the year ended March 31, 2006.