PE-backed Crocodile branded apparel maker files for IPO

Coimbatore-based SP Apparels Ltd has filed its draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India for its proposed initial public offering (IPO).

The company, which makes and retails menswear in India under the Crocodile brand, is looking to raise up to Rs 215 crore through a fresh issue of shares. The IPO includes an offer for sale by Jacob Ballas that is looking to part-exit.

It also comes across as the second apparel firm to look at an IPO in the recent past. Last December, another PE-backed firm Monte Carlo Fashions had floated its IPO. Monte Carlo, which generates much higher profits compared to SP Apparels, never managed to touch the IPO issue price after listing.

Here's a snapshot of the IPO:

  • Fresh issue of shares by the company to raise Rs 215 crore besides an offer for sale of 900,000 shares by New York Life Investment Management India Fund II, a fund managed by mid-market PE firm Jacob Ballas.
  • Bankers: Motilal Oswal Investment Advisors and Centrum Capital.


Established in 1989, the company specialises in the manufacture and export of knitwear, mainly children's and women's wear to large retailers in Europe and the US, apart from manufacturing and retailing menswear. The product range for knitted garments for infants and children includes body suits, sleep suits, tops and bottoms.

For financial year 2014-15, the company exported approximately 29.15 million pieces of knitted garments for infants and children directly to international customers, including TESCO and Primark.

It has two subsidiaries, Crocodile Products Pvt Ltd (CPPL) and SP Apparels (UK) (P) Ltd (SPUK).

CPPL, a joint venture with Crocodile International Pte. Ltd (CIPL), is engaged in the business of establishing and managing units to manufacture, trade, deal, import and export garments. It has also signed a technology licensing pact with CIPL for the exclusive manufacture, distribution and marketing of menswear products under the trademark ‘Crocodile’ in India.

It sells the ‘Crocodile’ branded products through a sales and distribution network that includes 31 exclusive brand outlets, of which 27 are company owned and operated stores and four are franchise stores, besides third-party e-commerce platforms.

SPUK was incorporated in 2014 to explore possible marketing opportunities and engage in trading activities with new customers in the UK, Ireland and other European countries.

The company 20 operating manufacturing facilities.

Currently, the promoters’ group led by P Sundararajan owns around 87.69 per cent of the company.


For 2014-15, revenue rose to Rs 479 crore from Rs 452 crore in the previous year. Net profit increased to Rs 10 crore from Rs 6.6 crore. The company has been stuck at single-digit sales growth trajectory for the past four years while its net profit had shrunk in previous years before managing to cross the Rs 9.7 crore mark touched in FY12.

Use of IPO proceeds

Of the total, the company plans to use Rs 63 crore to repay debt, Rs 70 crore for expansion and modernisation of its factory in Tamil Nadu, Rs 27.8 crore to open new stories for selling 'Crocodile' products, Rs 4.9 crore for addition of balancing machinery for its existing dyeing unit at SIPCOT and rest for general corporate purposes.


In November 2006, Jacob Ballas through New York Life Investment Management India Fund II had picked up a 10.71 per cent stake in SP Apparels for Rs 36 crore. At present, it owns a 10.5 per cent stake in SP Apparels and will sell around half of it in the IPO.

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