Campus Activewear Ltd - IPO Note


Campus Activewear Ltd - IPO Note


Price range
Rs. 278-292
Issue Period:
Apr 26, 2022
Apr 28, 2022
April 26, 2022

Stock Info

CNX Nifty
Face value (Rs.)
Market lot
Issue size
Rs. 1400 cr.
Public Issue
4.80 cr. shares
Market cap post IPO
Rs 8886 cr.
Equity Pre - IPO
152.16 cr.
Equity Post - IPO
152.16 cr.
Issue type
Offer For Sale

Shareholding (Pre IPO)

Source: Ace equity, StockAxis Research

Shareholding (Post IPO)

Source: Ace equity, StockAxis Research

Key Strengths

India’s largest and fastest growing sports and athleisure footwear brand with a robust product portfolio across the demand spectrum:
CAL is the largest sports and athleisure footwear brand in India in terms of value and volume for FY21. They sell their products across price points, geographical locations, and demographics, using their ‘omnichannel experience’. Therefore, CAL is able to cater to the varied requirements of consumers as well as provide them with the ease of purchasing the products using the channel most suited to them.

Sustained focus on design and product innovation:
The company has adopted a fashion forward approach to retailing to ensure that they have a faster design conceptualization to production cycle. They launch various new styles of footwear with different features such as shock absorption and reflect technology across different price categories every year. They are able to launch their products within 120 to 180 days from the date of product conceptualization. For instance, they have launched 2,580 new designs from FY19 to 9MFY22.

Difficult to replicate integrated manufacturing capabilities supported by robust supply chain:
CAL has control over quality and access to production planning which leads to faster turnaround times. Sole manufactured for complex, premium products are controlled by them to control quality, turnaround time and protect their intellectual property. For generic manufacturing, which is volume based and easier to manufacture, they outsource it with little impact on manufacturing timelines and pressure on turnaround times. They are entitled to preference in capacity allocation and turnaround times and undertake 100% inspection of all soles for quality control.

Robust omni-channel sales and distribution network with Pan-India presence:
The company provides their consumers an ‘omnichannel experience’ that enables brand discovery and products sales & marketing through physical locations and varied online channels. They have established a sales network with Retail touch points among 28 states and 664 cities Pan India. CAL is a leading Footwear brand on Flipkart, Myntra & Nykaa. By means of their omnichannel approach, they offer a holistic experience to their consumer throughout the purchase cycle. Their omnichannel experience is media agnostic, involving, either or both, offline and online interactions, resulting in seamless product discovery, evaluation, purchase, and post purchase experience.

Strong brand recognition, innovative branding, and marketing approach:
CAL is a strong brand that has consumers trust, as evidenced by their leadership position in the sports and athleisure footwear industry in India. They have spent a considerable amount of time conceptualizing and implementing unique brand awareness and marketing strategy to move from stand-alone trade led marketing to direct-to-consumer marketing. They have highlighted their brand as being aspirational, accessible, and affordable fashion. They have launched an integrated marketing campaign combining various online and offline means for targeting consumers.


  • Deterioration of brand image: Brand awareness is essential for the company’s continued growth and financial success, and its operations are influenced by brand marketing and advertising initiatives.
  • Disruption in distribution network: Company is reliant on its trade distribution and direct-to-consumer channels for a majority of total sales, any disruptions to the operations of these channels may adversely affect sales.
  • Highly competitive market: The sports and athleisure footwear industry is highly competitive in India. Company compete primarily against international sportswear brands, local branded manufacturers and manufacturers from the unorganized sector. Failure to compete effectively may result in a decline in revenues and profitability.
  • The issue is purely an OFS: The issue is purely an OFS and company will not get any capital from this issue. All proceeds will go to such selling investors.

Company Description

Incorporated in 2005, Campus Activewear Limited (CAL) is India's largest sports and athleisure footwear brand. The company manufactures and distributes a variety of footwear like Running Shoes, Walking Shoes, Casual Shoes, Floaters, Slippers, Flip Flops and Sandals, available in multiple colours, styles and at affordable prices. Campus Activewear sells its products through online platforms and offline stores. Campus Activewear Limited has a pan-India trade distribution network, with over 400 distributors in 28 states and 625 cities. The company also has 18,200 retailers across India. The company owns and operates five manufacturing facilities across India with an installed annual capacity for assembly of 25.60 million pairs as of September 30, 2021.


CAL is catering to the fastest growth segment of the sports & athleisure footwear market. Campus had an approximately 15% market share in the branded sports and athleisure footwear industry in India by value for FY20, which increased to approximately 17% in FY 2021. The sports and athleisure footwear industry is expected to grow at a CAGR of 16%, set to reach ~Rs 2.14 lac crore by FY25 from ~Rs 1.4 lac crore in FY20. With its diverse product portfolio, established brand name, strong distribution network, and growing digital presence, we believe Campus is well placed to capitalize on domestic opportunities. However, at the upper price band of Rs 292, the IPO is valued at 12x of FY21 sales which is in-line with peer-set valuation. Also, the issue is purely an OFS and company will not get any capital from this issue. All proceeds will go to such selling investors. Hence, we recommend investors to SUBSCRIBE ONLY with LONG TERM VIEW.

Peer comparison (Rs crore) FY19 FY20 FY21
Company Revenues EPS ROE (%) Revenues EPS ROE (%) Revenues EPS ROE (%) PS ratio
Campus Activewear 595 1 21% 732 2 26% 711 1 9% 12
Metro Brands 1217 6 23% 1285 6 12% 800 2 8% 19
Bata India 2931 26 21% 3056 25 18% 1708 (7) -5% 14
Relaxo Footwear 2292 9 19% 2410 12 19% 2359 12 21% 12

Key Information

Use of Proceeds:
The total issue size is of Rs. 1,400 crore is fully an OFS constituting offer for sale of up to 4.79 crore equity shares by investors. Company will not get any capital from this issue. All proceeds will go to such selling investors.

Book running lead managers:
JM Financial, BofA Securities, CLSA India, Kotak Mahindra Capital

CAL is run by Hari Krishan Agarwal, Chairman and Managing Director of the company. He has over 37 years of experience in the footwear industry in India. He is well supported by an experienced senior management team.

Financial Statement

Profit & Loss Statement:- (Consolidated)

Yr End March (Rs Cr) FY19 FY20 FY21
Net Sales 595.00 732.00 711.00
Material Cost 321.00 380.50 374.00
Employee Cost 43.00 57.00 55.00
Other Expenses 131.00 159.00 166.00
EBITDA 100.00 135.50 116.00
EBITDA Margin 17.00% 19.00% 16.00%
Depreciation & Amortization 14.00 23.00 33.00
EBIT 86.00 112.50 83.00
Other Income 2.00 2.00 4.00
Interest & Finance Charges 21.00 17.00 17.00
Profit Before Tax - Before Exceptional 67.00 97.50 70.00
Tax Expense 28.00 36.00 43.00
Net profit for the year 39.00 61.50 27.00
Net Profit Margin 7.00% 8.00% 4.00%