Sai Silk (Kalamandir) IPO continue to get muted investor response; booked 13% on Day 2 so far

The Rs 1,201-crore initial public offering (IPO) of Sai Sillk (Kalamandir) continued to witness a muted response from the investors during the second day of the bidding process. The issue, which had opened for bidding on Wednesday, September 20, was subscribed only seven per cent at the end of day one.

Sai Silk is selling its shares in the range of Rs 210-222 per shares and investors can make a bid of a minimum of 67 equity shares and its multiples. The issue includes a fresh share sale component worth Rs 600 crore, while an offer-for sale (OFS) of up to 2.7 crore equity shares worth Rs 601 crore.

According to the data, the investors made bids for 49,92,304equity shares, or only 13 per cent, compared to the 3,84,86,309 equity shares offered for the subscription by 1.40 pm on Thursday, September 21. The bidding for the issue will close on Friday, September 22.

The allocation for retail investors was booked 21 per cent, while the portion for qualified institutional bidders (QIBs) saw a subscription of merely 11 per cent. However, the portion reserved for non-institutional investors was not even off the mark as of the same time.

Sai Silks (Kalamandir) provides ethnic apparel and value-fashion products. Its product range includes ultra-premium and premium sarees suitable for weddings, party wear, occasional and daily wear, lehengas, men's ethnic wear, children's ethnic wear and value fashion products and more. The company was incorporated in 2005.

Sai Silks raised Rs 360.3 crore from 26 anchor investors on monday. It allocated 1,62,29,707 equity shares at a price of Rs 222 apiece. Motilal Oswal Investment Advisors, HDFC Bank and Nuvama Wealth Management are the lead managers to the issue and Bigshare Services is the registrar to the issue.

Majority of the brokerage firms are positive on the issue. "Sai Silk is valued at a FY23 PE multiple of 34.9 times, and EV/EBITDA of 14.6 times The IPO looks attractively valued across various valuation parameters when compared with its peers. With decent return ratios and margins, the risk reward ratio for long term investors looks favourable," said SBICap Securities.

Sai Silk manages production both in-house and through third parties, employing a system-driven and algorithmic approach throughout their supply chain and inventory management. To strengthen their brand, it plans to expand its digital marketing, utilize brand ambassadors, and engage in outdoor advertising, said GEPL Capital.

"This strategy provides Sai Silk with a competitive edge in women's ethnic wear, ensuring strong margins and returns. With consistent growth expected from store expansion in the coming years," it added with a 'subscribe' rating for the issue.



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