Khadims to maintain asset light strategy

The company's IPO is a major public issue from eastern India after a long lull.

"We will continue with asset light strategy for expanding retail footprint. In manufacturing capability, we will not invest in own any manufacturing plant as there are excess capacities in north India which we will leverage,"

Khadims chief financial officer Ishani Ray said here today at the IPO roadshow.

Almost 90 per cent of the products sold by Khadims are outsourced and the company has only two manufacturing units in Kolkata and  Kanpur.

Khadims outsources from some 135 vendors across country, Ray said.

She said, the IPO would be issued primarily to allow exit by PE investor Fairwinds which currently holds 34 per cent stake in Khadims after investing Rs 90 crore in 2013.

While, Fairwinds will exit completely selling its stake at about Rs 443 crore, promoter-cum-chairman and managing director Siddhartha Roy Burman will be diluting about three per cent of the stake raising some Rs 51 crore and fresh issue of Rs 50 crore.

Khadims promoters stake will get reduced to 60 per cent post issue from 66 per cent and public holding will be 40 per cent.

The IPO priced at price band of Rs 745-750 a share of Rs 10 each is valued at Price Earning (PE) multiple of 43.7 times of FY17' earnings.

Burman said Khadims has a retail presence of 853 stores across the country.