Bengaluru-based, Stanley Lifestyles Ltd, the country's largest super-premium and luxury furniture brand with a market share of 5.61% in terms of revenue in Fiscal 2022, has filed its Draft Red Herring prospectus (DRHP) with capital market regulator Sebi to raise funds through for its initial public offering (IPO).
The IPO with a face value of Rs 2 consists of fresh issue of up to Rs 200 crore and an offer for sale (OFS) of up to 9.13 million by Promoter and Investor Selling Shareholders.
The offer for sale comprises of up to 1.18 million equity shares by Sunil Suresh and Shubha Sunil, up to 5.54 million equity shares by Oman India Joint Investment Fund II, up to 1 million equity shares by Kiran Bhanu Vuppalapati, and up to 2.25 lakh equity shares by Sridevi Venkata Vuppalapati.
In 2018, the Oman India Joint Investment Fund had invested into the company, securing a 26% ownership stake. This marked the company's inaugural round of private equity funding. Subsequently, in 2019, the company secured an additional Rs 100 crore in funding from the Oman India Joint Investment Fund II. According to the information provided in the Draft Red Herring Prospectus (DRHP), as of that date, the Oman India Joint Investment Fund holds 13.86 million shares, or 26.86% of the Company and it plans to sell 5.54 million shares in the Offer for Sale (OFS). OIJIF II's portfolio also encompasses investments in Divgi TorqTransfer, Annapurna Finance, PNB MetLife, Capital Small Finance Bank, My Digi Gold, ShopKirana, and HomeLane.
The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Investors and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.
The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares aggregating up to Rs 40 crore ("Pre-IPO Placement"). If such placement is completed, the fresh issue size will be reduced.
As per the DRHP, the proceeds from the Fresh Issue to the tune of Rs 90.13 crore will be used for expenditure for opening the New Stores, Rs 39.99 crore expenditure for opening the Anchor Stores, Rs 10.04 crore expenditure for renovation of the Existing Stores, Rs 8.18 crore for funding the capital expenditure requirements for purchase of new machinery and equipment by the Company and its Material Subsidiary, SOSL and general corporate purposes.
The Bengaluru-based company has over 1000 designs and 3000 SKUs and is also one of the few domestically originated high-end and luxury consumer brands in India that have a substantial presence in both manufacturing and retail operations. Its customers can select from 10 different types of leathers and fabrics that it has in over 300 colours.
The promoters initially started their operations by offering car seat leather upholstery services to renowned global automotive brands and later transitioned into the luxury furniture retail sector in India. Building on the promoters' expertise in luxury leather upholstery, the company opened its first retail store in Bengaluru, Karnataka, in 2011.
Stanley holds the fourth position in terms of revenue in the home furniture segment in India for Fiscal 2022 and stands out as one of the early Indian companies to venture into the super-premium and luxury furniture segment, and it is among the few Indian companies operating in various price categories, including super-premium, luxury, and ultra-luxury, through its multiple brands.
Over the years, the brand has evolved from a sales-focused model to a design-led operation and has become a comprehensive provider of home solutions. It stands as the only super-premium and luxury Indian brand offering a wide range of home solution offerings, including sofas, armchairs, kitchen cabinets, beds, mattresses, and pillows, among others.
The brand recently launched a new format store "Stanley Personal" to expand its product portfolio to include handcrafted shoes, bags and other lifestyle products aiming to connect with a younger demographic.
It company operates two manufacturing facilities located in Electronic City and Bommasandra Jigani Link Road, Bengaluru, Karnataka. Its in-house manufacturing expertise coupled with its retailing model differentiates its from its Indian and Foreign Peers.
As of June 30, 2023, it operated 34 'company-owned and company-operated' or "COCO" stores, all located in major metro-cities such as Bengaluru, Chennai, New Delhi, Mumbai, and Hyderabad. Additionally, it has 21 'franchisee-owned and franchisee-operated' or "FOFO" stores in 22 cities across nine states and union territories in India.
The company retails its furniture products through three distinct store formats: Stanley Level Next, Stanley Boutique, and Sofas & More. Each format is carefully tailored to cater to specific segments of the market, ensuring a comprehensive reach. Stanley Level Next is dedicated to serving customers seeking ultra-luxury home solutions, with a keen focus on the highest price points within this segment. Stanley Boutique, on the other hand, caters to those interested in luxury-category products, aligning with price points characteristic of this market. Lastly, Sofas & More by Stanley addresses the needs of customers in search of super-premium products, accommodating the price points associated with this particular market segment and at one of its existing stores on Hosur Road, Bengaluru, Karnataka, offering potential customers a complete "Stanley" brand experience under one roof.
For the fiscal year 2023, the consolidated revenue from operations increased 43.39% to Rs 419 crore against Rs 292.20 crore a year ago, primarily due to an increase in retail sales. Net profit increased by 50.65% from Rs 23.22 crore in fiscal 2022 to Rs 34.98 crore in fiscal 2023. EBITDA was Rs 82.72 crore in Fiscal 2023 compared to EBITDA of Rs 59.01crore in Fiscal 2022, while EBITDA Margin was 19.74% in Fiscal 2023 compared to 20.19% in Fiscal 2022.
Axis Capital Limited, ICICI Securities Limited, JM Financial Limited, and SBI Capital Markets Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.