Green shoots in IPO market? After Lavasa, apparel major Monte Carlo readies to raise funds

In signs of revival in IPO space,apparel major Monte Carlo has filed its draft offer documentwith Sebi, becoming the second firm announcing plans to hitthe primary market after the new government came to power.

Resort town operator Lavasa filed its draft IPO paperswith the capital markets regulator earlier this month. It wasthe first company to approach Sebi with IPO plans after theNarendra Modi government took charge on May 26.

Lavasa is planning to raise Rs 750 crore through theinitial public offer, but Monte Carlo has not yet disclosedthe size of its IPO.

Monte Carlo Fashions Ltd plans to sell 25 percent stakethat would comprise of sale of over 54 lakh shares bypromoters and other shareholders.

“Our company expects that the listing of the equityshares will enhance our visibility and brand image among our
existing and potential customers and provide liquidity to theexisting shareholders,” Monte Carlo said in its draft redherring prospectus.Proceeds from the IPO would go to the sellingshareholders. They are Jawahar Lal Oswal, Dinesh Oswal, Kamal
Oswal, Kanchi Investments Ltd, Oswal Woollen Mills Ltd,Abhilash Growth Fund Pvt Ltd and Vanaik Investors Ltd.The ‘Monte Carlo’ brand was launched by Oswal WoollenMills Ltd (OWML) in 1984.

Effective April 2011, OWML’s woollen and cotton apparelbusiness under the brand ‘Monte Carlo’ was demerged into MonteCarlo Fashions Ltd.

In the 2013-14 fiscal, the company raked in net profit ofRs 553.80 million on total revenues of Rs 5,188.92 million.
“We have been able to increase our total revenue fromfiscal 2012 to fiscal 2014 at a compound annual growth rate of17.57 percent and our profit after tax has increased at acompound annual growth rate of 6.47 percent over the sameperiod,” the prospectus said.

In the recent weeks, there have been sharp rallies in thesecondary markets and the landslide victory by the BJP-led NDAin the general elections is widely expected to further boostinvestor sentiment.

PTI