India's PE-backed Khadim files for IPO

According to a prospectus, Khadim will issue an undisclosed number of new shares for up to INR500 million ($7.7 million), with existing shareholders including Fairwinds to sell up to 6.6 million secondary shares. Fairwinds will exit its entire 33.8% stake - or 5.9 million shares - in the company. Pricing has yet to be announced.

Proceeds from the offering will be used primarily to pay down the company’s debt, with INR400 million earmarked for this purpose. Khadim expects the IPO to strengthen its capital base and enhance the visibility of its brand.

Founded as SN Footwear in 1981, Khadim operates 829 retail stores under the Khadim’s brand across 23 states and one union territory in India, of which 162 are company-owned. The rest are franchisee-managed. Another 357 distributor locations are found within department stores and multi-brand outlets catering to lower and middle-income Indian consumers.

As the second-largest footwear retail brand in India, Khadim’s expects to benefit from the strong projected growth in the country’s domestic shoe market as a result of rising disposable incomes. The industry is projected to reach $12.6 billion in value by 2020, from $7.2 billion last year.

For the year ended March 2017, the company reported revenue of INR6.3 billion, up from INR5.4 billion the year before. Over the same period, net profit grew from INR252 million to INR308 million.

Fairwinds first invested in Khadim in 2013, committing INR125 million for a 4% stake. It increased its holding to 33.8% the following year after investing an additional INR775 million.

At the time the firm was known as Reliance Equity Advisors, the private equity division of the Reliance Group. The GP spun out the following year and launched a $300 million fund targeting companies in the consumer, services, manufacturing, and infrastructure sectors.

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• Topics
• South Asia
• Consumer
• IPO
• India
• Reliance Capital
• Exit