Celebrity Fashions IPO opens on December 19

Televisionpoint.com Team
Celebrity Fashions Limited, one of the leading exporters of men's shirts and the owner of "Indian Terrain" Brand in the domestic market, proposes to enter the Capital Market on December 19 2005 with an IPO of 4,550,000 Equity shares of RS 10 each through 100% Book Building process. The Issue closes on 22nd December 2005. The price band has been fixed at RS 160 to RS 180 per equity share.

The Issue will constitute 25.35% of the fully diluted post issue paid of Celebrity Fashions . The Issue includes reservation of 50,000 Equity shares for employees, leaving a net issue to the public of 4,500,000 Equity shares. Upto 50% of the Net issue will be allocated on a proportionate basis to Qualified Institutional Buyers, of which 5% will be reserved for Mutual Funds. Further, not less than 15% of the Net Issue will be for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Net Issue for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. The Book Running Lead Manager to the Issue is IL&FS Investsmart Limited and Registrar is Intime Spectrum Registry Limited.

Celebrity Fashions proposes to utilize the funds to part finance the acquisition of a trouser facility, setting up of exclusive Indian Terrain stores and of the garment manufacturing capacity. It proposes to open 20 exclusive Indian Terrain Stores in next 3 years and set-up a new factory for manufacturing of tops with a consolidated capacity of 920 production machines. The factory will have 265 new machines and 655 production machines shall be relocated from the existing facilities. Celebrity Fashions has entered into a memorandum of understanding with Ambattur Clothing Limited for the acquisition of its undertaking engaged in the manufacturing of all types of trousers with a total capacity of 6 mn trousers per annum.

Celebrity Fashions believes that there exists strong opportunities for growth in the global textile industry in a quota free regime and the branded apparel domestic market. “To take advantage of the opportunities and with a view to improve the margins through value addition, we are acquiring the trouser manufacturing plant, expanding in our garment manufacturing capacity and our reach in the branded apparel segment through own stores", said Mr.V.Rajagopal, Chairman and Managing Director of Celebrity Fashions .

Celebrity Fashions Ltd is engaged in the business of designing, manufacturing and selling of men's garments. It was set up in the year 1988 as a small 50 machine factory and 72 people venture in Chennai. Today it caters to the demand of leading international brands and also to the domestic market through own brand "Indian Terrain". It has grown to 8 factories (4283 machines), housed over 300,000 sq.ft. employing over 5000 employees. Celebrity Fashions 's strength includes strong management team and motivated and efficient work force, experienced team with industry specific knowledge, strong infrastructure set-up, experience with cost-plus engagement models, delivery capabilities, commitment to quality, a de-risked business model and strong customer base. Now it intends to expand, strengthen and consolidate its current position in the domestic and global market. It proposes to expand product range and increase product reach in the Indian branded apparel market and the international outsourced garment business.

Celebrity Fashions started operations with a focus on exports of shirts when restrictions were still prevalent. Today it has achieved the status of one of the leading exporters of men's shirts from India and have acquired the status of two star export house. Several international brands source their of shirts from Celebrity Fashions Limited. Its leading customers include top international brands both from America and Europe. Some of the regular customers are Kohl's Corporation-USA, Timberland -USA, Eddiebauer- USA, Diesel, Europe, Marlboro Classics-Europe and Armani-. Its export sales recorded a compounded annual growth of 19.32% during the last 5 years increasing from RS 523.36 mn in 2000-2001 to RS 1060.70 mn in 2004-2005. The exports during the first half of the current fiscal ended 30tSeptember 2005 have touched RS 686.10 million.

Celebrity launched its foray into the domestic branded ready to wear men's garment market in the year 2000 under the brand name "Indian Terrain". The brand "Indian Terrain" has in a short span of five years established itself and has earned an image for quality and Style. The Indian Terrain Brand products are sold through various channels-five of its own stores and retailed through 276 National Store Chains (NSC)/Multi Brand Outlets (MBO).The domestic sales of branded apparel recorded a compounded annual growth of 24.14% during the last 5 years increasing from RS 10.57 mn in 2000-01 to RS 266.78 mn in 2004-2005.

As per the profoma consolidated financial statement, total sales by Celebrity Fashions grew at a CAGR of 19.66% from RS 654.09 mn in 2000-01 to RS 1,341.04 mn in 2004-05. EBIDTA grew at a CAGR of 35.25 % from RS 38.07mn in 2000-01 to RS 127.46 mn in 2004-05. Profit after tax grew at a CAGR of 28.45% from 2.13 mn in 2000-2001 to RS 58.02 mn in 2004-05.