Campus Shoes to sell 16% in IPO, will raise $250 mn

The Mumbai-based company, whose backers include US based PE fund TPG, plans to submit its draft red herring prospectus (DRHP) on Friday, one of the persons said.

Campus plans to sell about 16 per cent stake, through a secondary route. Existing investor TPG will sell about 10 per cent stake, another investor QRG will sell 2 per cent and promoters will sell about another 4 per cent stake.

Campus is considering seeking a valuation of about Rs11000 crore ($1.5 billion), one of the persons said.

Besides private equity fund TPG Growth, the family office of the promoters of Havells Group– QRG Enterprises Limited also holds a minority stake in Campus. Both hold together about 25 per cent stake in Campus, acquired in 2017 at a valuation of Rs6000 crore.

ET first reported on Campus Activewear’s plans to float Rs2000-crore IPO in June.

Kotak Mahindra, JM Financial, Bank of America and CLSA are the lead managers for the IPO.

“We are considering listing the company in the medium to long term and it’s honestly too early to comment on any specifics on valuation, size and structure,” Nikhil Agarwal, CEO, Campus Activewear had told ET. Spokespersons with TPG, QRG declined to comment.

Overall footwear market in India is Rs60,000 crore, of which sports and leisure shoes are about Rs10,000 crore. Campus holds about 15-20 per cent market share in India, while Reebok is the leader with 45 per cent market share.

Metro Brands Ltd., the footwear retailer backed by veteran investor Rakesh Jhunjhunwala,listed on Wednesday at Rs 437 apiece, a 13 per cent discount to its IPO price of Rs 500. Currently, Metro shares are trading at Rs481.6, at a market capitalisation of Rs13075 crore.

In 1983, HK Agarwal founded the ‘Action’ brand, a household name in the casual and sports footwear segment in India. Later in 1997, the Campus brand was launched.

The company reported a revenue of Rs 718.2 crore in FY21 compared to Rs 732 crore a year ago. EBITDA of the company stood at Rs 117 crore, compared to Rs 136.3 crore a year ago.

Campus Group’s revenue grew at a CAGR of 15 per cent over FY15-FY21. The revenues remain prone to seasonality with the majority of sales generated over August-December; the winter season in north India, according to India Ratings.

Campus strengthened its brand presence during FY21 by increasing exclusive brand outlets as well as expanding its presence in the online segment. The brand already benefits from a healthy presence in north India and is now focused on expanding in other regions as well. During FY21, CAPL expanded its distribution network to 350 distributors.

Major footwear brands in India are Bata India, Relaxo Footwears Limited, Liberty Shoes, Khadim India, Nike, Adidas AG and Puma.

India is the second largest producer of footwear globally, accounting for 13 per cent of the global footwear production, next to China, which dominates the global footwear industry accounting for close to 67 per cent of the market, according to the Council for Footwear, Leather & Accessories.

However, the average per capita footwear consumption in India continues to be low at 1.66 pair per annum in comparison to the global average consumption of 3 pair per annum and developed countries average of 6-7 pair per annum.