Mumbai: Monte Carlo Fashions Ltd (MCFL) has received a go-ahead from the Securities and Exchange Board of India (Sebi) for an estimated Rs 500-crore initial public offering (IPO), wherein 54.33 lakh equity shares would be sold by shareholders including promoters and private equity firm Samara Capital.
Paving the way for IPO, Sebi issued its observations on September 12 for the public offer, which would be an offer for sale (OFS) by selling shareholders. The lead merchant banker for the public offer is SBI Capital Markets.
The OFS is expected to hit the market later this month and will constitute 25 per cent of the post paid-up equity share capital of the company.
The company has said that its PE investor Samara Capital has decided to divest a 9.5 per cent stake and promoters will dilute 15 per cent through offer for sale.
In June 2012, Samara Capital, a Mauritius-based India focused private equity firm, through its affiliate, KIL, acquired a stake in MCFL and currently holds 18.51 per cent of the pre-offer capital of the company acquired at an investment amount aggregating to Rs 175 crore.
After the IPO, KIL will hold a 9.04 per cent stake in the company after selling 20,58,026 equity shares.
The company expects the listing of equity shares will enhance visibility and brand image among existing and potential customers and provide liquidity to the existing shareholders, Monte Carlo executive director Sandeep Jain said.
Launched in 1984 as an exclusive woolen brand by Oswal Woollen Mills Ltd (OWML), Monte Carlo plans to continue to focus on the growth of its cotton and cotton-blended apparel to establish pan-India presence.
"As part of our growth strategy, the company has a target of establishing 275 'Monte Carlo exclusive brand outlets' by the end of fiscal 2017. We seek to penetrate further in the western and southern regions of India," Mr Jain had earlier said.
He said the company will continue to focus expansion in Tier-I cities in North India, alongside focusing expansions in Tier-II cities in North, East and Central India and Tier-I cities of South and West India by opening additional Monte Carlo Exclusive Brand Outlets.