Genesis Colors Ltd, the owner of fashion label Satya Paul, has filed a draft red herring prospectus with the capital markets regulator Securities and Exchange Board of India for an initial public offering.
The IPO comprises a fresh issue of shares by the Sequoia Capital-backed company and an offer for sale by some shareholders.
The company will use the amount raised from the IPO mainly to increase its stake in a subsidiary that distributes premium international brands such as Jimmy Choo and Armani.
Here’s a snapshot of the company and the issue:
Issue size: A fresh issue of shares worth Rs 380 crore ($57 million) by the company and an offer for sale of up to 1.92 million shares by Mayfield Fund, Henderson Private Equity and Innoven Capital, among others.
Bankers: ICICI Securities, Edelweiss Financial Services, Ambit Pvt. Ltd.
Objects of the issue: The company will use Rs 317.4 crore raised from the issue to increase its stake in unit Genesis Luxury Fashion Pvt Ltd from Splendor Distributions Ltd and promoter Sanjay Kapoor to 94.42% from 52.43%. Part of the money will be used for general corporate purposes.
Founded in 1998, Genesis Colors is the holding company of well-known Indian fashion brands Satya Paul and Bwitch. Besides, it holds marketing and distribution rights in India for several international luxury labels through Genesis Luxury Fashion, according to the company’s website.
As of 31 August 2016, Satya Paul products were sold at 38 exclusive brand outlets and 99 shop-in-shops across 19 cities. These products were also sold online at its own website and five other e-commerce platforms. It has a presence in the US, Canada and Dubai through local distributors.
Bwitch products were sold at three exclusive brand outlets, 152 shop-in-shop units across 19 cities and 221 local trade stores across the country. These products are also available through six online platforms.
Genesis Luxury Fashion distributes premium brands such as Jimmy Choo, Armani, Paul Smith and Bottega Veneta. The Genesis Group also has joint ventures with the British brand Burberry, Italian menswear brand Canali and Villeroy & Boch of Germany for tableware. The international brands contributed Rs 317.9 crore, or 73.58%, to consolidated revenue in 2015-16.
The consolidated revenue for 2015-16 increased 3.2% to Rs 440.2 crore from Rs 426.5 crore the year before, as per the draft red herring prospectus. The company has been narrowing its losses for the past few years and almost broke even at the net level last financial year. It posted a net loss of Rs 74.6 lakh in 2015-16 compared with a net loss of Rs 10.8 crore the year before.
In 2008, Sequoia Capital and Mayfield put in about Rs 110 crore for a minority stake in Genesis Colors. The following year, the company raised an additional Rs 80 crore from Henderson Private Equity.
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