Sequoia Capital-backed company, Genesis Colors Ltd has received clearance from capital markets regulator Securities and Exchange Board of India (SEBI) for an initial public offering, the third firm to get regulatory nod to float an IPO in 2017.
The company owned fashion label Satya Paul, received final observations from SEBI on 3 February The company had filed its draft red herring prospectus with the regulator in September. The IPO comprises a fresh issue of shares and an offer for sale by existing shareholders. The company will primarily use the amount raised from the IPO to increase its stake in the subsidiary that distributes premium international brands including Jimmy Choo and Armani, as has been revealed through sources.
Talking about this clearance Mr. Nikhil Mehra, CEO, Genesis Group explained to us that, “The company has got a clearance on its DRHP from SEBI for an IPO to raise approximately 500 crores. Out of this 380 crores is the primary capital we are looking at through the issue of fresh shares and the rest is through the offer of sale of equity shares by existing investors. “
Founded in 1998, Genesis Colors is the holding company of well-known Indian fashion brands Satya Paul and Bwitch. It also holds marketing and distribution rights in India for several international luxury labels. Until 31 August 2016, Satya Paul products were sold at 38 exclusive brand outlets and 99 shop-in-shop units across 19 cities. The products were also sold on its own website and across five other e-commerce platforms. It has a presence in the US, Canada and Dubai. Bwitch products were sold at three exclusive brand outlets, 152 shop-in-shop units across 19 cities and 221 local trade stores in in India. These products are also available on six online platforms.
The consolidated revenue for 2015-16 increased 3.2% to Rs 440.2 crore from Rs 426.5 crore year-on-year, as per the draft prospectus. The company has been narrowing its losses over the past few years and posted a net loss of Rs 74.6 lakh in 2015-16, compared with Rs 10.8 crore the previous fiscal year.
The Genesis Group also has joint ventures with British fashion brand Burberry, Italian menswear Canali and Villeroy & Boch of Germany for tableware. The IPO is being managed by ICICI Securities, Edelweiss Financial Services and Ambit.
