Monte Carlo Fashion, the leading apparel brand in India, will be launching public issue on Dec. 3, 2014. It is offering 5,433,016 equity shares of face of Rs 10 each for cash at a price band of Rs 630 to Rs 645 a share through an offer for sale by selling shareholders. The public offer will close on Dec. 5, 2014.
Commenting on the Monte Carlo Fashions IPO, Mehta Group said, ''Considering strong growth in the textile brand segment Monte Carlo is well placed and connected with customers belonging to both the mass and premium categories. The challenge now is to go pan-India and expand presence across different geographies. Monte Carlo has drawn up an aggressive store roll out plan for the same which will see the company's store count grow to 275 from 192 at present. The company also continues to invest in brands in various formats. Hence we expect revenues to grow on the back of a strong brand portfolio and a well established and growing distribution channel. We recommend investor to Subscribe on the issue for listing gains of 15-20%.''
Meanwhile, Hem Securities said, ''The company is bringing the issue at price band of Rs.630-645 at price-earnings multiple of 24.75-25.35 on post issue EPS of Rs.25.45. 'Monte Carlo' has been recognized as a 'Superbrand' for woollen knitted apparel. Considering strong brand image, vast distribution network and firm fundamentals; the issue looks attractively priced. Hence we recommend investor to Subscribe the issue.''
ICICIdirect said, ''MCFL sources 95% of its woollen yarn from its sister concern OWML, thereby eliminating the risk of supply/price shock for the company. At the IPO price band of Rs 630-645, MCFL trades at 25x FY14 EPS of Rs 25.4. Further, for its cotton garment segment, MCFL follows an asset light model, whereby it sources the fabric from outsourced players. However, given lack of branded apparel in woollen segment and possibility of a shift from unorganised to organised in apparel segment, we envisage earnings CAGR of 18% in FY14-17E, making valuations attractive for MCFL. Hence, we recommend subscribe to the IPO.
On the other hand, Angel Broking, said, ''Monte Carlo is the flagship brand of the company which is a market leader in the woollen knitted apparel industry in India and has been recognized as a ‘Superbrand’ for woollen knitted apparel in each edition of Consumer Superbrands India since its first edition in September 2004. We recommend Subscribe to the issue at the lower end of the price band from a two-year perspective. From a one-year perspective, we see limited upside potential as valuations seem to be fair.
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