Provogue to up retail space to 5 lakh sq ft

Provogue (India) Limited, a manufacturer and distributor of branded fashion ready-to-wear garments will enter the capital market on June 10, 2005, with its maiden initial public offer of 40.5 lakh equity shares.

It will be offered at a price band of Rs 130-150 which will take the post-issue paid-up capital to 1.62 crore shares of Rs 10 face value each. The issue is expected to garner Rs 60.74 crore for the company.

Of the net offer, upto 50 per cent has been reserved for allotment on a discretionary basis to qualified institutional buyers,15 per cent for allotment to non-institutional investors and 35 per cent to retail investors on a proportional basis.

The company was set up in 1988 and its key business is to design, manufacture and sell branded readymade garments and other accessories.

It has about 41,000 sq feet retail space through exclusive stores and national chain stores and multi-branded outlets in major towns and cities. By 2010, the company plans to increase its retail selling space to 5 lakh sq feet.

The company intends to deploy the net proceeds from the issue of shares for funding capital expenditure, expanding present manufacturing and product development facilities and also to meet working capital requirements. Part of the funds from the IPO will also be utilised for expanding its distribution network.

It will also invest substantially in product development facilities and a training centre to stay ahead in fashion trends and retain its premium market position.

The company posted an income of Rs 122.52 crore for the year ended FY 05 with a profit after tax of Rs 7.21 crore. Margins are about 46 per cent overall "" 56 per cent from exclusive Provogue stores and 35 per cent from multi-brand stores. Advertisement and distribution expenditure accounts for about 23 per cent of sales.