Fairwinds PE-backed Khadim India’s IPO scrapes through on final day
Photo Credit: Shah Junaid/VCCircle

The initial public offering (IPO) of Khadim India Ltd, the country’s second-largest branded footwear retailer by exclusive stores, scraped through on the final day of the issue on Monday thanks to bids from retail and institutional investors. However, wealthy individuals and corporate investors stayed away.

The offering of 5.07 million shares—excluding the anchor allotment—was covered 1.9 times after receiving bids for nearly 9.61 million shares, stock-exchange data showed.

Retail investors, whose bid value cannot exceed Rs 2 lakh per application, bid for 2.31 times the 2.53 million shares set aside for them.

The portion reserved for qualified institutional buyers was subscribed 2.44 times while the quota for non-institutional investors was covered only 18%.

The IPO was covered 14% on the first day on Thursday and 45% on Friday.

The Kolkata-based footwear maker, which counts Fairwinds private equity as its backer, is seeking a valuation of Rs 1,347.24 crore ($207.84 million) through the IPO. The company will see a 40.3% stake dilution on the post-issue basis.

The IPO of Rs 543.05 crore comprised a fresh issue of shares worth Rs 50 crore and a sale of 6.57 million shares by Fairwinds and Siddhartha Roy Burman, chairman and managing director at Khadim India. Fairwinds, which first invested in the company in 2013, is selling its entire 33.83% stake.

On Wednesday, Khadim India raised about Rs 162.92 crore by selling shares to anchor investors ahead of the IPO. The company sold 2.2 million shares to 13 anchor investors at the upper end of the Rs 745-750 price band set for the IPO.

Khadim India had filed its draft red herring prospectus with the Securities and Exchange Board of India in July. It got SEBI approval in September.

VCCircle had first reported in April that Khadim was considering an IPO and had hired investment bankers, nearly a decade after it first attempted to go public in 2007. Axis Capital Ltd and IDFC Bank Ltd are managing the offer.

It had planned to sell 5.5 million shares, or a 30% stake to raise a tad less than Rs 100 crore, according to the company’s DRHP then filed with SEBI.

Khadim competes with homegrown footwear companies and listed peers such as Relaxo Footwears Ltd, Bata India Ltd, Sreeleathers Ltd and Liberty Shoes.

Axis Bank and IDFC Bank are the merchant bankers to Khadim India’s IPO.

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