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S D Retail IPO: Things Smart Investors Need to Know

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Incorporated in May 2004, S D Retail Limited is a prominent player in the sleepwear market, operating under the brand name "SWEET DREAMS." The company designs, manufactures, outsources, markets, and retails stylish and comfortable sleepwear for men, women, and children. SWEET DREAMS has built a reputation for offering high-quality products that celebrate the transition from work to home life, focusing on comfort and style for the entire family.

Core Business and Market Position:

S D Retail operates with an asset-light model, which allows for scalability and efficiency, especially in opening Exclusive Brand Outlets (EBOs). The company sells its products through a variety of channels, including distributors, EBOs, multi-brand outlets (MBOs), and popular e-commerce platforms such as Myntra, AJIO, Nykaa, Flipkart, Amazon, and its own website. With a growing presence in both domestic and international markets, S D Retail has positioned itself as a key player in the expanding sleepwear industry. As of May 2024, the company employed 240 individuals across various departments.

 

Purpose of the IPO

The primary purpose of the S D Retail IPO is to raise ₹64.98 crores through a fresh issue of 49.6 lakh shares. The company plans to utilize the funds to support its business expansion and meet working capital requirements. By raising capital through the IPO, S D Retail aims to strengthen its market presence, enhance operational efficiencies, and capture new growth opportunities within the competitive retail landscape in India. The fresh influx of capital will be strategically allocated to ensure long-term sustainability and growth in its core business areas.

Expected Funds to be Raised

S D Retail expects to raise ₹64.98 crores through its IPO. The price band for the IPO is set between ₹124 and ₹131 per share. Retail investors can apply for a minimum lot size of 1,000 shares, requiring an investment of ₹131,000, while HNIs need to invest in at least two lots (2,000 shares), amounting to ₹262,000. The listing will occur on the NSE SME platform, providing liquidity and market exposure to investors.

Key Dates to Remember

  • IPO Open Date: 20th September 2024
  • IPO Close Date: 24th September 2024
  • Allotment Date: 25th September 2024
  • Initiation of Refunds: 26th September 2024
  • Credit of Shares to Demat: 26th September 2024
  • Listing Date: 27th September 2024

Pricing and Lot Size of S D Retail IPO

  • Price Band for the IPO: ₹124 to ₹131 per share
  • Minimum Lot Size: 1,000 shares
  • Total Issue Size: ₹64.98 Crore
  • Retail Investor Minimum Investment: ₹131,000
  • HNI Minimum Investment: ₹262,000 (2 lots)

How to Apply for the S D Retail IPO?

Online Application Process:

  • Visit your stockbroker or depository participant's website.
  • Login to your Demat account.
  • Select 'IPO' from the menu.
  • Choose the 'S D Retail IPO' and enter the bid quantity.
  • Complete the payment and submit the application.

Financial Health and Performance

Key Financial Metrics:

  • Revenue Growth: Increased by 20% from ₹13,568.86 lakhs in FY 2023 to ₹16,328.48 lakhs in FY 2024.
  • Profit After Tax (PAT): Rose by 77%, with PAT reaching ₹759.76 lakhs in FY 2024 compared to ₹430.17 lakhs in FY 2023.
  • Net Worth: Improved from ₹3,420.22 lakhs in FY 2023 to ₹4,179.98 lakhs in FY 2024.
  • Total Borrowings: Increased to ₹4,354.72 lakhs in FY 2024 from ₹2,051.31 lakhs in FY 2023.
  • Assets: Grew by 38% between FY 2023 and FY 2024, from ₹8,835.65 lakhs to ₹12,225.54 lakhs, indicating a healthy balance sheet.
  • Reserves and Surplus: Increased by 21% to ₹4,054.87 lakhs in FY 2024.
  • Growth Prospects: The company’s revenue and profit growth reflect its strong market presence and potential for further expansion in the retail sector.

Investment Risks and Opportunities

Potential Risks of Investing in the IPO:

  • Competition in the retail sector
  • Market volatility affecting retail demand

Opportunities and Growth Potential:

  • Expanding market base in India
  • Strategic positioning for higher revenue growth post-IPO

Conclusion


The S D Retail IPO provides an investment opportunity for those looking to invest in a growing retail company. With a clear focus on business expansion and operational growth, the company is aiming to strengthen its market position. However, investors should consider both the risks and opportunities before making any investment decisions.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

Frequently Asked Questions

What is the S D Retail IPO and why is it significant?

Answer Field

The S D Retail IPO is a public offering of ₹64.98 crores, aimed at raising capital to fuel the company’s expansion. It is significant as it provides investors a chance to invest in a growing retail company in India.

What is the price band for the S D Retail IPO, and how was it determined?

Answer Field

The price band is set at ₹124 to ₹131 per share. This was determined based on the company’s valuation, industry comparison, and investor demand.

What are the key risks and rewards of investing in the S D Retail IPO?

Answer Field

Key risks include market competition and volatility, while potential rewards include the company’s expansion and revenue growth prospects.

When will the S D Retail IPO shares be listed, and what is the expected market response?

Answer Field

The shares will be listed on September 27, 2024. The market response may vary, but the IPO has generated interest due to its strategic growth plans.

What documents should I review before investing in the S D Retail IPO?

Answer Field

Review the Draft Red Herring Prospectus (DRHP), company financials, and any public disclosures made by the company.

How will the S D Retail IPO impact existing shareholders?

Answer Field

The IPO will dilute the existing shareholding but is expected to provide value through capital infusion and business growth.

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