Monte Carlo IPO - To Invest or to Skip?

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Though market is at its peaks but very few companies have dared to approach the public for the issue and one of the better companies among the lot is Monte Carlo Fashions Ltd which is entering in the capital markets with an initial public offering (IPO) of 5,433,016 Equity Shares of Rs 10 each.

Launched in 1984 as an exclusive woollen brand by Oswal Woollen Mills Ltd (OWML) - Monte Carlo, Oswal said will continue to focus on the growth of its cotton and cotton-blended apparel to establish pan-India presence.

Monte Carlo has 190 exclusive outlets, of which 80 are company owned. As part of their growth strategy, the company has a target of establishing 275 'Monte Carlo exclusive brand outlets' by the end of fiscal 2017. They seek to penetrate further in the western and southern regions of India.

Monte Carlo Fashions Ltd IPO has been priced at Rs 630/- at lower level and Rs 645/- at upper level. 

Monte Carlo Fashions Limited is the leading apparel brand in India; especially famous for exclusive woolen brand 'Monte Carlo'. Company cater to the premium and mid-premium branded apparel segment for men, women and kids, offering a comprehensive line of woolen, cotton and cotton-blended knitted and woven apparel and home furnishings through our 'Monte Carlo Exclusive Brand Outlets' and multi brand outlets, including a network of national chain stores under the 'Monte Carlo' brand.

The promoters led by Jawahar Lal Oswal of Oswal Woolen Mills and private equity investor Samara Capital are together offering 5,433016 equity shares of face value of Rs 10 each for cash at a price band of Rs 630 to Rs 645 per equity share through an offer for sale. Bids can be made for a minimum of 23 equity shares and in multiples of 23 shares thereafter. The company may consider the participation by anchor investor.

While Samara Capital is diluting 7.58 per cent stake, the promoters will be selling 17.42 per cent of their holding. Post issue Samara Capital’s stake will come down from 18.51 per cent to 10.93 per cent. Two years ago Samara Capital had invested Rs 175 crore in the company in tranches.The issue opens on Dec 03, 2014 and closes for subscription on Dec 05, 2014. The equity shares of the issue are proposed to be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Monte Carlo Issue Detail: 

Issue Open: Dec 3, 2014 - Dec 5, 2014 
Issue Type: 100% Book Built Issue IPO
Issue Size: 5,433,016 Equity Shares of Rs. 10
Issue Size: Rs. 342.28 - 350.43 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 630 - Rs. 645 Per Equity Share
Market Lot: 23 Shares
Minimum Order Quantity: 23 Shares
Listing At: BSE, NSE

The shares will be listed on the BSE and the NSE. Book running lead managers are SBI Capital Markets, Axis Capital, Edelweiss Financial Services and Religare Capital Markets.

Monte Carlo is the fifth company on the main board to hit the bourse this fiscal. Four companies – Sharda Cropchem (R351 crore), Snowman Logistics (R197 crore), Wonderla Holidays (R181 crore) and Shemaroo Entertainment (R120 crore) – have tapped capital markets so far in FY15. An additional 23 issues cumulatively worth R173 crore were listed on the SME platform, taking total IPO fund raising for FY15 to R1,024 crore.

IPOs worth more than R7,000 crore is waiting to hit the markets. Seven companies already have requisite approval from Sebi and another 12-15 companies have either filed their drafts or are considering tapping the capital markets. These companies have the potential to raise an estimated R4,500 crore.

Now the key question which arises is that whether to invest in the issue or not, we are of the opinion that Monte Carlo is a brand by itself and people trust it for its quality. One can enter in this stock with a long term perspective to get good returns.

Looking to make some quick money by holding for short term; then consider going in for our delivery stock tips where we generally hold for 5-8 days and make good profit on every call.