Ethnic wear accounted for about 32% of the overall apparel retail market in India as of fiscal 2020. Women’s ethnic wear was the largest segment, followed by menswear in the second place representing approximately10% of the total ethnic wear market.
A recent study has shown that the estimated value of the ethnic apparel retail market was ₹1.8 trillion in fiscal 2020. It contracted sharply by 38-40% in fiscal 2021 owing to the pandemic. But the ethnic apparel industry is expected to grow at a combined annual rate of14-15% and reach ₹2.35-2.40 trillion by fiscal 2025.
Ethnic wear company Vedant Fashions Ltd, popularly known as Manyavar, has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise funds via an initial public offering. The issue comprises a pure offer for sale of up to 36.36 million shares by existing promoters and shareholders.
Manyavar
Vedant Fashions is the largest company in the men’s wedding and celebration wear segment in the country. Brand Manyavar is a category leader with a pan-India presence. The company’s other brands include Twamev, Manthan, Mohey, and Mebaz.
The Kolkata-based company has a retail footprint of 1.1 million square feet, covering 525 exclusive brand outlets including 55 shop-in-shop. It has a presence in 207 cities and towns in India and operates 12 exclusive brand outlets in the US, Canada, and the UAE as of June 2021. The firm aims to double its national footprint over the next few years.
Important Figures
In fiscal 2021, the company’s revenue from operations was at ₹5.6 billion, against ₹9.15 billion a year ago. Net profit for the period stood at ₹1.32 billion, versus ₹2.36 billion last year.
The primary risk to the business is that demand for the company’s wedding and celebration wear is dependent on the volume and frequency at which weddings, festivals, and other celebrations are organized. Also, the business is vulnerable to seasonal variations, which may cause fluctuations in revenues.
Regulations imposed by the government during the pandemic, including restrictions on the conduct of large-scale weddings and celebrations, curbs on travel and business operations, and curfews, affected the demand for Vedant’s products even as store traffic decreased sharply. Therefore, quarterly operating results and cash flows for the financial year may not be comparable.