Stanley Lifestyles IPO Review: Stanley Lifestyles Limited is coming up with its Initial Public Offering. The IPO will open for subscription on June 21, 2024, and close on June 25, 2024. In this article, we will look at Stanley Lifestyles IPO Review 2024 and analyze its strengths, weaknesses, financials and GMP. Keep reading to find out!
Stanley Lifestyles IPO Review – About The Company
Stanley Lifestyle was established in 2007 as a manufacturer and retailer of furniture. The company specializes in the super-premium segment and has a furniture brand in India called “Stanley.”
They are involved in both manufacturing and retail operations, offering products in different pricing segments such as super-premium, luxury, and ultra-luxury. The company’s promoters initially provided car seat leather services before transitioning to retailing luxury furniture.
Additionally, Home Solutions, a part of Stanley Lifestyle, offers a diverse range of products including sofas, kitchen cabinets, armchairs, mattresses, beds, and various cased goods like coffee tables and dining tables.
Note: If you want to learn Candlesticks and Chart Trading from Scratch, here’s the best book available on Amazon! Get the book now!
The company operates on a company-owned and company-operated (COCO) and franchisee-owned and franchise-operated (FOFO) model, with a presence across India.
The company offers products under the brands “Sofas & More by Stanley,” “Stanley Level Next,” and “Stanley Boutique.” Stanley has offices in major cities like New Delhi, Chennai, Mumbai, Bengaluru, and Hyderabad. They run 38 COCO stores and 24 FOFO stores in 21 states and Union Territories in India.
Stanley Lifestyles IPO Review – Industry Overview
The Indian economy’s rise over the previous decade has resulted in a new upper middle class desiring luxury and premium residences. The growing demand for housing, interior design services, furnished alternatives, renovations, and changing housing trends all contribute to the rise of the furniture market, which furnishes homes in the real estate sector.
The rise in India’s real estate sector has allowed the country’s furniture market to expand rapidly. By fiscal 2027, the organised market is predicted to account for 35% of the entire market share, with an annual growth rate of 36%, outpacing the traditional market.
Stanley Lifestyles IPO Review – Financial Highlights
If we look at the financials of Stanley Lifestyles, we can see that its operating revenues have increased from ₹195.78 crores in FY21 to ₹418.99 crores in FY23. This gives the company a CAGR growth of 46.29% on its sales between the prior mentioned duration
The rise in operating revenues is accompanied by an increase in profits from ₹1.92 crores in March 2021 to ₹34.97 crores in March 2023. Furthermore, the company’s profit margins have increased from 0.98% in FY21 to 8.35% in FY23. This gives the company’s profit CAGR to a staggering 326.48% from FY21 to FY23.
As of the nine months ended of FY24, the company has earned a revenue of ₹313.31 crores and has retained a profit of ₹18.69 crores.
As of FY23, the company reported a of 16.29% and RoCE of 16.63% indicating a good return on shareholders’ capital and average efficiency in its resource utilization.
Furthermore, the company’s debt-to-equity ratio stood at 0.86 which means the company has majorly operated using its own funds.
Peers of the Company
Stanley Lifestyles Limited is among the few Indian companies present across various price points, i.e., super-premium, luxury and ultra-luxury segments, through its various brands.
According to the RedSeer Report, as of January 31, 2024, the company’s retail presence in India was three times the size of its nearest competitor in the luxury/super-premium furniture industry
Given the size of the company’s manufacturing and retail, there are no directly listed companies in India or internationally with whom its business model can be compared with
Strengths of the Company
- The company is one of the leading super-premium and luxury consumer brands in India, excelling in manufacturing and retail operations. It boasts the largest number of stores and is the fastest-growing brand in the furniture segment.
- The company caters to a wide range of home furnishing products and aims to establish itself as a one-stop destination for its customers.
- The company has an extensive pan-India retail presence across its various store formats which allows it to target various markets ensuring enhanced brand visibility.
- The company regularly updates its product range to ensure it stays relevant and high-quality. This keeps its product catalogue trendy, fresh, and aligned with current customer preferences and market trends.
- The company has implemented a vertically integrated model to control its processes, from raw material procurement to retail. It ensures that its design and manufacturing capabilities provide quality products that stand out in the market.
Weaknesses of the Company
- The company provides a warranty for its products sold. If obligations for product warranties exceed the company’s reserve, it can have an adverse effect on the business.
- The business involves prolonged inventory days and extended cash conversion cycles, which may lead to increased carrying costs and impact liquidity, affecting our financial performance and cash flows.
- The company faces risks from fluctuating foreign exchange rates due to its foreign currency transactions, which could negatively impact its operating results.
- The company’s insurance coverage may be inadequate to cover losses or liabilities. This could adversely affect its financial condition and results of operations in the event of a large uninsured loss or if the insured loss significantly exceeds the insurance coverage.
- The company’s success relies on the uninterrupted supply of various raw materials, which are delivered by suppliers. Any disruption to this supply can adversely affect the company’s operations.
Stanley Lifestyles IPO Review – GMP
The shares of Stanley Lifestyles Limited traded at a premium of 42.82% in the grey market on June 20, 2024. The shares tarded at Rs.547. This gives it a premium of Rs 158 per share over the cap price of Rs 369.
Also read…
Stanley Lifestyles IPO Review – Key IPO Information
Promoters:: Sunil Suresh And Shubha Sunil
Book Running Lead Manager: Axis Capital Limited, ICICI Securities Limited, JM Financial Limited and SBI Capital Markets Limited.
Registrar to the Offer: KFin Technologies Limited
The Objective of the Issue
The net proceeds received from the offer for sale will be utilised for the following purposes:
- Investing in subsidiaries for opening new stores, anchor stores, and renovating existing stores.
- For funding the capital requirements for the purchase of new machinery and equipment by the Company and its Material Subsidiary, Stanley OEM Sofas Limited.
- General corporate purposes.
Conclusion
In this article, we looked at the details of Stanley Lifestyles IPO Review 2024. Overall, Stanley Lifestyles’ growth prospects, vertically integrated operations, size and brand strength in the premium furniture segment make it an attractive investment opportunity, despite some potential risks and challenges.
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written by Aaron Vas
By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
