Stanley Lifestyles IPO: All You Need To Know

Stanley Lifestyle Ltd. will launch its initial public offering to raise up to Rs 537.02 crore on Friday. The IPO's total issue size is approximately 1.46 crore shares, consisting of fresh 54.2 lakh equity shares worth Rs 200 crore, and an offer for sale of 91.33 lakh equity shares amounting to Rs 337.02 crore at the upper price limit.

The company has set a price band of Rs 351-369 per share for the issue, with face value set at Rs 2 apiece. The IPO will be open for subscription from June 21 to June 25. Investors need to apply for a minimum of 40 shares, and in multiples thereafter.

The shares will be listed on both the BSE and the National Stock Exchange. Investors who bid for the issue can follow the steps mentioned here to check the Stanley Lifestyles IPO allotment status, which will likely be finalised on Wednesday, June 26. This IPO will account for 25.53% of the company's post-IPO paid-up equity capital.

• Issue opens: June 21.

• Issue closes: June 25.

• Issue price: Rs 351-369 per share.

• Fresh issue: Rs 200 crore.

• Offer for sale: Rs 337.02 crore.

• Total issue size: Rs 537.02 crore.

• Bid lot: 40 shares.

• Listing: BSE and NSE.

The net proceeds from the fresh equity issue will be allocated as follows:

• Rs 140.16 crore for investments in subsidiaries,

• Rs 6.66 crore for capital expenditure on machinery and equipment

• Remainder for general corporate purposes.

Stanley Lifestyles began its journey by providing car seat leather upholstery services for prominent global automotive brands before evolving into a luxury furniture retailer in India.

SLL retails its products under the "Stanley" brand and has built strong brand recognition and customer loyalty through the quality of its products, targeted marketing strategies, and advertising campaigns like "Beautiful Living," "Design Glamour," "Luxury Unlimited," and "Bed of Dreams." The company values its customers as brand ambassadors, generating publicity through testimonials, endorsements, and word-of-mouth advertising.

Stanley Lifestyles has shown notable growth over the last three fiscal years. On a consolidated basis, the company reported a total income and net profit of Rs 201.71 crore and Rs 1.92 crore, respectively, in fiscal 2021; Rs 297.76 crore and Rs 23.22 crore in fiscal 2022; and Rs 425.62 crore and Rs 34.98 crore in fiscal 2023, respectively. For the nine months ending Dec. 31, 2023, the company's net profit stood at Rs 18.70 crore on a total income of Rs 322.29 crore.

Over the past three fiscal years, the company posted an average earnings per share of Rs 4.60 and an average return-on-net worth of 11.25%. The IPO is priced at a price to book value, or P/BV, ratio of 8.03 based on a net asset value of Rs 45.97 as of Dec. 31, 2023, and at a P/BV of 4.81 based on the post-IPO NAV of Rs 76.68 per share (at the upper band). If we attribute its post-IPO fully diluted paid-up equity capital to its fiscal 2024 annualised earnings, the asking price stands at a price-to-earnings, or P/E, ratio of 84.44. The P/E ratio of 60.10, based on fiscal 2023 earnings, suggests an aggressive pricing for the issue.

SLL reported profit-after-tax margins of 0.98% in fiscal 2021, 7.95% in fiscal 2022, 8.35% in fiscal 2023, and 5.97% for first nine months of fiscal 2024. The return on capital employed (RoCE) margins for these periods were 5.52%, 12.90%, 16.63%, and 8.63%, respectively.

SLL has paid dividends at rates of 14.50% in fiscal 2021, 94.03% in fiscal 2022, and 189.93% in fiscal 2023. The company adopted a dividend policy in August 2023, which is based on its financial performance and future prospects.