Koutons Retail India Ltd., a leading garment manufacturing and exporting company will enter the primary markets. The price band of the issue is fixed at Rs 370-415 per share. The issue will open for subscription on September 18 and closes on September 21. The 100 per cent book building issue of 35, 24,439 shares will constitute 11.54 per cent of the post-issue capital. The fresh issue consists of 26, 07,897 equity shares and an offer for sale of 9,16,542 shares by existing share holders.
Koutons Retail proposes to utilise the proceeds to set up exclusive brand outlets, establish a integrated manufacturing facility, purchase plant and machinery to increase the finishing and manufacturing capacity and improve its information and technology network.
At the offer price band of Rs 370-Rs 415 and on the basis of FY 2007 earning (post-issue) of Rs. 11.29, it is priced at a PE of 36.76x on the higher end of the price band and 32.78x at the lower end of the price band. The issue seems to be attractive when compared to its peers like Provogue (India) trading at P/E 66.6x, Kewal Kiran trading at P/E 16.32x, pantaloon Retail (I) trading at P/E 121.8x, Zodiac clothing trading at P/E 25.47x etc. We feel investors can subscribe to the issue to get short term as well as long-term gains.
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