IPO-bound sports shoe maker Campus Activewear saw its online sales jump to around Rs 400 crore, accounting for 37 percent of total sales in the nine months ended December 2021, primarily driven by small town shoppers.
The Delhi-based firm is launching its Rs 1,400-crore Initial Public Offering (IPO) through the offer for sale route on Tuesday at a price band of Rs 278-292 per share.
Nikhil Agarwal, the company's chief executive and the son of founder chairman H K Agarwal, told PTI on Monday: "Massive growth in online sales has even surprised us. While online sales were only Rs 19 crore in FY19, it rose to Rs 50 crore in FY20 and grew three-fold to Rs 150 crore in FY21 and soared to around Rs 400 crore during the first nine months of FY22. This is as much as 37 percent of our Rs 1,118 crore revenue in this period."
He also said that the company would continue to drive this sales channel and expects the share to go up further, apart from pushing women's and children's segment that currently contributes only Rs 250 crore.
On an average, online sales gets the company an additional 500 basis points operating margin than traditional trade, where commission is around 35 percent.
He said they are getting almost 50 percent sales from the north followed by east and west, and admitted that its weak in the south.
As of December 2021, Campus -- founded by H K Agarwal, who was also the founder of Action shoes in 1995 -- reported Rs 1,118 crore in revenue and earned Rs 120 crore annualised basis in net income.
During the period, net margin rose to an industry-leading 10.1 percent up from 7.3 percent or Rs 26 crore on a revenue of Rs 711 crore in FY21, chief financial officer Raman Chawla said.
He explained that both net income and sales declined in FY21 due to the pandemic. The bottom line was also impacted by a Rs 25-crore write-off following changes in the Finance Act.
Campus, which was launched in 2006, competes with global brands like Adidas, Rebook and Puma, and domestic brands like Bata and Relaxo. Its market share rose from 15 percent in FY21 to 17 per cent in FY22 and down from Rs 851 crore in the previous year, Chawla said.
The IPO is entirely an OFS sale by promoters and existing shareholders. Senior and junior Agarwals and other promoter shareholders (Rajiv Goel and Rajesh Kumar Gupta) will collectively sell 4 percent of equity from 78.21 percent of their stakes. Existing investors since April 2017 -- TPG Growth (17 percent) and QRG Enterprises (the family office of the Havel's group founders holding 4.1 percent) will pare their stakes to 9.6 percent and 2 percent, respectively.
TPG and QRG entered the firm at a valuation of Rs 1,650 crore in April 2017 investing Rs 330 crore, which has since grown steadily to Rs 9,000 crore now, Chawla said.
Campus has 28 million units production capacity across its five plants -- two in Himachal Pradesh's industrial belt of Baddi, one each in Dehradun and Haridwar in Uttarakhand, and Gannaur in Haryana.
(With PTI inputs)