The initial public offering linked to sports shoe producer Campus Activewear saw its online sales surge to around Rs 400 crore, accounting for 37% of total sales in the nine months to December 2021, mostly driven by humble customers from the community. The Delhi-based company is launching its initial public offering (IPO) of Rs 1,400 crore via sale offering at a valuation range of Rs 278-292 per share on Tuesday. The monstrous development of online sales even shocked us. While online sales were only Rs 19 crore in FY19, they rose to Rs 50 crore in FY20 and tripled to Rs 150 crore in FY20. FY21 and took off at around Rs 400 crore in the first nine months of FY22.
He also said that the company will continue to lead this sales channel and expects the share to increase further, apart from pushing the women and children segment which currently only contributes Rs 250 crore.
This represents up to 37% of our revenue of Rs 1,118 crore during this period, Nikhil Agarwal, Managing Director of the company and son of Founding Chairman HK Agarwal, told PTI on Monday.
On average, online sales provide the company with an additional operating margin of 500 basis points compared to traditional commerce, where the commission is around 35%.
In December 2021, Campus – founded by HK Agarwal, who was also the founder of Action shoes in 1995 – reported revenue of Rs 1,118 crore and annualized net income of Rs 120 crore.
He said they get almost 50% of sales from the north, followed by the east and the west, and admitted it’s low in the south.
During the period, net margin rose to an industry-leading 10.1% from 7.3% or Rs 26 crore on FY21 revenue of Rs 711 crore, a said chief financial officer Raman Chawla.
He explained that net profit and sales declined in FY21 due to the pandemic. Net income was also impacted by a write-off of Rs 25 crore following changes in the Finance Act.
Campus, which was launched in 2006, competes with global brands like Adidas, Rebook and Puma, and national brands like Bata and Relaxo. Its market share increased from 15% in FY21 to 17% in FY22 and down from Rs 851 crore in the previous year, Chawla said. The IPO is entirely a sale of SFO by existing promoters and shareholders. Agarwals senior and junior and other promoter shareholders (Rajiv Goel and Rajesh Kumar Gupta) will collectively sell 4% stake in 78.21% of their stakes. Existing investors since April 2017 – TPG Growth (17%) and QRG Enterprises (the family office of the Havel Group founders holding 4.1%) will reduce their stakes to 9.6% and 2%, respectively.
TPG and QRG entered the business at a valuation of Rs 1,650 crore in April 2017 by investing Rs 330 crore, which has since risen steadily to reach Rs 9,000 crore now, Chawla said. Campus has a production capacity of 28 million units across its five factories – two in the Baddi industrial belt in Himachal Pradesh, one in Dehradun and Haridwar in Uttarakhand, and Gannaur in Haryana.
Summary of news:
- Campus derives 37% of its gross revenue from online sales in the first nine months of FY22
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