Credo Brands makes lukewarm debut; lists 1% higher against issue price

The Initial Public Offering (IPO) of Credo Brands Marketing (Mufti) was subscribed 51.85 times on the back of heavy demand from institutional buyers

Credo Brands Marketing, which owns denim brands Mufti, made a lukewarm market debut on Wednesday with its shares listing just 1 per cent higher at Rs 282 against the issue price of Rs 280 on the NSE and BSE.

Post listing, the stock of the speciality retail company sank nearly 7 per cent below its issue price to Rs 261.60 on the NSE. It touched a low of Rs 262.05 on the BSE.

However, the stock reversed the losses and was quoting at its day’s highest level at Rs 293.20, nearly 5 per cent higher over its issue price, at the time of this report. The stock recovered 12 per cent from day’s low.

 

A combined 9.9 million equity shares had changed hands on the NSE and BSE.

The Initial Public Offering (IPO) of Credo Brands Marketing was subscribed 51.85 times on the back of heavy demand from institutional buyers.

The Qualified Institutional Buyers (QIBs) portion was subscribed a staggering 104.95 times while the portion for non-institutional investors received 55.10 times subscription. The quota for Retail Individual Investors (RIIs) got subscribed 19.94 times.

Credo Brands Marketing is mainly engaged in the business of selling fashion casual garments and accessories under the brand name “Mufti”. The company's product portfolio includes shirts, T-shirts, jeans, chinos, jackets and many more.

Credo Brands Marketing has delivered a lower topline growth of 3.5 per cent between FY20-23 when compared with its peers.

However, it has delivered healthy profits with a growth at around 70 per cent during the same period led by expansion in operating margins from 10 per cent in FY20 to 33 per cent in FY23.

The company has witnessed muted performance in Q1FY24 due to seasonality; however, one can expect healthy growth in FY24, said analysts at Nirmal Bang Securities in an IPO note. 

Credo Brands Marketing has a decent market share of 1.3 per cent in mid-price + branded men’s casual led western wear market, said SBI Securities. 

The company’s financial performance has shown robust growth in the last two years on structural and operational efficiencies. On a peer comparison basis, the company has attractive return ratios and hence the issue looks attractively valued, it had said in a pre-listing note.