S D Retail specializes in the design, manufacture, and retail of sleepwear under the brand name “SWEET DREAMS.” The company offers a broad portfolio of stylish and comfortable sleepwear catering to all family members, celebrating the transition from work to home life.

The S D Retail IPO amounts to ₹64.97 crores, featuring a fresh issue of 49.6 lakh shares priced between ₹124 and ₹131 per share. The subscription period is set from September 20 to September 24, 2024, with allotment expected by September 25 and listing on the NSE SME projected for September 27.

Retail investors must invest a minimum of ₹131,000 for 1,000 shares, while High-Net-Worth Individuals (HNIs) need to buy a minimum of 2,000 shares, costing ₹262,000. BEELINE CAPITAL ADVISORS PRIVATE LIMITED is the book-running lead manager, and KFIN TECHNOLOGIES LIMITED serves as the registrar.

As of 12:16 PM on September 20, 2024, the IPO's live subscription status showed 0.06 times on its first day. The Grey Market Premium (GMP) is expected to range from ₹5 to ₹10, reflecting potential listing gains, though trading based on GMP is not advised due to its unregulated nature.

Objectives of the IPO

Proceeds from the fresh issue will be utilized as follows:

₹1,648.85 Lakhs for capital expenditure on new exclusive brand outlets (“EBOs”).

₹3,500.00 Lakhs for funding working capital requirements.

General corporate purposes.

Financial Performance

S D Retail has demonstrated robust financial growth:

Revenues from Operations: ₹16,328.48 lakhs (FY 2024), ₹13,568.86 lakhs (FY 2023), ₹12,873.65 lakhs (FY 2022).

EBITDA: ₹1,334.80 lakhs (FY 2024).

Profit After Tax: ₹759.76 lakhs (FY 2024).

For the S D Retail IPO, the company is issuing shares with a pre-issue EPS of ₹5.52 and a post-issue EPS of ₹4.05. The pre-issue P/E ratio is 23.73x, while the post-issue P/E ratio is 32.34x, compared to the industry average. The company’s ROCE for FY24 stands at 15.61%, and ROE is 6.29%, indicating a fairly priced IPO.

Investment Recommendation

Given the overall performance and valuation metrics, while the Grey Market Premium suggests potential listing gains, investors are advised to avoid the S D Retail IPO for immediate gains or long-term investment due to the inherent risks and market conditions.

The current active IPO is Avi Ansh Textiles Limited, Phoenix Overseas Limited, BikeWo GreenTech Limited, SD Retail Limited, Kalana Ispat.

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