Campus Activewear to Raise Rs.1,800 crore via IPO

Campus Activewear to raise Rs.1,800 crore via IPO

by 5paisa Research Team Last Updated: 2022-12-09T22:52:26+05:30

India’s second largest sports footwear brand, Campus Shoes, will shortly file its draft red herring prospectus (DRHP) with SEBI for its proposed IPO. Campus Activewear plans to raise around Rs.1,800 crore and it will entirely be by way of an offer for sale in which the promoters and some of the early investors will look to take an exit, apart from getting the company listed.

Campus Activewear is backed by US based Private Equity firm, TPG. The OFS targets a valuation of $1.5 billion for the company or Rs.11,400 crore. It will offer 16% equity as part of the OFS for an approximate value of Rs.1,800 crore. 

Out of the 16% on offer, TPG will offer 10% in the OFS, promoters will sell about 4% while QRG Enterprises will sell 2%. Incidentally, QRG Enterprises is the family office of the Delhi based Havells Group.

The Indian footwear market in India is estimated at around Rs.60,000 crore out of which the sports and leisure shoes segment is approximately around Rs.10,000 crore. In this specific segment, Reebok is the market leader with 45% market share while Campus Activewear is the second largest in this space with a market share of 15%.

However, the potential for growth in the footwear segment is huge. India has per capita consumption of footwear at 1.66 per annum against the global average of 3 and developed markets average of 7. There is still a lot of room. 

India is the second largest manufacturer of footwear in the world with 13% share and with China it occupies 80% of the footwear market. China, of course, is the world leader in footwear manufacture with 67% of the global market.

Campus Activewear has a pedigree of nearly 40 years. It started off as Action Shoes brand way back in 1983 and later in 1997 it launched the Campus brand of footwear. So, it has a strong network as well as a chain of exclusive outlets to market its products apart from an established brand name in the country.

For the financial year FY20-21, Campus Activewear reported total revenues of Rs.721 crore and EBITDA of Rs.117 crore. However, like most of the retail and consumer facing plays, Campus Activewear also came under pressure due to prolonged shutdowns leading to lower footfalls and dipping sales.

The company has grown its revenues at a compounded annual growth rate of over 15% between FY15 and FY21. In the footwear market, it competes with names like Reebok, Adidas, Nike, Puma, Liberty, Khadim, Bata and Relaxo.

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