Campus Shoes IPO may hit primary markets in May-22

One of India’s most prominent middle-end sports and leisure footwear company, Campus Activewear, will announce its IPO (100% OFS) in May 2022 shortly, The company had filed the DRHP with SEBI and the regulatory approval has already come in.

However, it had been biding its time for the overall market situation to stabilize. Now, the company plans to go ahead with its IPO in the month of May 2022 and also plans to list the stock in May itself.

Campus Activewear is backed by equity fund TPG Growth and QRG Enterprises. Campus Activewear, being cash rich, will use internal funds to expand. It will expand its distribution network and deepen its footprints with specific focus on the western and southern regions of India.

These regions are high on growth and also high on per-capita income and also on per capita spending, which makes these markets especially attractive. 

As part of the expansion of its retail footprint, Campus Activewear will look to substantially strengthen its network of exclusive brand outlets (EBO), which is its normal retail front-end route.

In addition, Campus Activewear will also enhance its omnichannel presence and also boost its share of online sales. Campus will also expand its offering into the high-margin women and kids portfolio of sportswear and athletic leisurewear market in India.

Currently, Campus Activewear has close to 100 exclusive brand stores out of which around 65 of these outlets are company-owned and the rest of the outlets operate on the franchise model.
 

During the full year FY21, Campus Activewear added a total of 190 new distributors while in H1-FY22 it added 53 distributors. Campus Activewear has an installed capacity to manufacture 2.56 crore pairs annually and achieved 9-month sales of Rs.1,000 as of Dec-21.

Recently, the company had opted for a price hike of around 5% to partially compensate the company for the inflationary pressure on key raw material inputs.

While FY21 revenues of Campus Activewear had fallen to Rs.711.28 crore due to the lag effect of the pandemic, it has normalized in the first 9 months of FY22. The good news is that its growth has been at a frenetic and impressive rate of 25% compounded annual growth rate (CAGR) in list 10 years.

Campus Activewear has a good geographical diversification of its market. For instance, 75% of its sales come from non-metro cities with only 25% coming from Tier-I cities.

The sports and athletic leisure market is currently at Rs.9,000 crore and is increasingly gravitating towards established and branded players. In the branded sports and athletic leisure footwear segment, Campus has an average annual market share of 17%.

The IPO will entirely be by way of an offer for sale (OFS) of 5.10 crore equity shares by promoters and existing shareholders. The selling shareholders in the OFS would include the promoters Hari Krishna Agarwal and Nikhil Aggarwal.

In addition, early institutional investors; TPG Growth III SF Pte Ltd and QRG Enterprises Ltd will also take an exit in the OFS. The promoters currently hold 78.21% in Campus Activewear with 21.05% with PE funds.

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