Stanley Lifestyles Ltd IPO: Should You Subscribe? Check GMP, Price Band, Lot Size

Stanley Lifestyles Ltd IPO Review: Stanley Lifestyles Limited plans to raise INR 537.02 crores through an IPO that will include a fresh issue of shares worth INR 200 crores and an offer for sale worth INR 337.02 crores. The corporation intends to invest in new and current stores, machinery, and general business operations.

Stanley Lifestyles Ltd IPO – Important Dates

Stanley Lifestyles Limited IPO Date	June 21, 2024 to June 25, 2024
Stanley Lifestyles Limited IPO Listing Date	June 28, 2024
Stanley Lifestyles Limited IPO Price	INR 351-369 per share
Stanley Lifestyles Limited IPO Lot Size	40 Shares
Stanley Lifestyles Limited IPO Total Issue Size	INR 537.02 crore
Stanley Lifestyles Limited IPO Basis of Allotment	June 26, 2024
Stanley Lifestyles Limited IPO Initiation of Refunds	June 27, 2024
Stanley Lifestyles Limited IPO Credit of Shares to Demat	June 27, 2024
Stanley Lifestyles Limited IPO Issue Type	Book Built Issue IPO
Stanley Lifestyles Limited IPO Listing At	BSE, NSE

Stanley Lifestyles Ltd IPO – Company Profile

Stanley is India’s premier super-premium and luxury furniture brand, known for large-scale production and sale. We are fourth in home furniture revenue and specialize in super-premium, luxury, and ultra-luxury areas.

They’ve created notoriety and devotion under the “Stanley” brand by selling great products and running campaigns like “Beautiful Living” and “Luxury Unlimited.” Their customers serve as brand ambassadors, endorsing Stanley through testimonials and word-of-mouth promotion.

They design, manufacture, and sell furniture across India through a network of business and franchise stores. Their integrated approach ensures quality, and their handcrafted items combine skilled craftsmanship, premium materials, and distinctive designs to provide a luxurious experience. The managing director of the company is Mr. Sunil Suresh.

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Stanley Lifestyles Ltd IPO Fundamental Analysis

Stanley Lifestyle’s fundamental study offers mixed results. Revenue increased annually but fell short this year. Profitability, EPS, and RoNW all fell as liabilities rose, indicating possible issues for investors.

Revenue Trend: The income rose from ₹2,922.04 million in March 2022 to ₹4,189.98 million in March 2023. The revenue for the current year’s 9-month period ending December 2023 is INR 3,133.11 million, which is lower than the previous year’s annual benchmark.
Equity and Liabilities: Both equity and total liabilities have consistently increased over time, indicating future growth and expansion. However, the debt-equity ratio has risen, indicating a greater reliance on debt funding.
Profitability: The profit after tax (PAT) declined from ₹232.19 million in March 2022 to ₹186.97 million in December 2023. Investors may be concerned about the fall in profitability.
Earnings per Share (EPS): The diluted EPS has declined from ₹4.14 in March 2022 to ₹3.83 in December 2023, indicating fewer earnings per share for investors.
Return on Net Worth (RoNW): The RoNW has fallen from 10.69% to 8.34%, suggesting a drop in the company’s capacity to create returns on shareholder equity.
Financial Position: Total assets have increased, indicating future business growth. However, the current ratio has fallen, indicating declining liquidity and likely difficulties in satisfying short-term obligations.
Inventory Turnover Ratio: The Inventory Turnover Ratio has decreased, which may indicate slow sales or inadequate inventory management.

Stanley Lifestyles Ltd IPO Financial Analysis

Particular	As of 31 March 2022	As of 31 March 2023	As of 31 December 2023
Revenue (₹ in million)	2,922.04	4,189.98	3,133.11
Equity (₹ in million)	2,056.02	2,237.99	2,481.90
Expenses (₹ in million)	2,658.19	3,792.22	2,975.66
Profit and Loss After Tax (₹ in million)	232.19	349.77	186.97
RoNW (%)	10.69	15.18	8.34
NAV per Equity Share (₹)	38.71	41.96	45.97
Diluted EPS only (₹)	4.14	6.37	3.83
Total Assets (in millions)	4,221.45	4,581.86	5,815.39
Total Liabilities (in millions)	2,165.43	2,343.87	3,333.49
Debt-Equity Ratio	0.63	0.68	0.86
Current Ratio (in times)	2.23	2.18	1.56
Inventory Turnover Ratio	1.35	1.71	1.10

Stanley Lifestyles Ltd IPO Peer Comparison

Stanley Lifestyles Limited sells super-premium, luxury, and ultra-luxury furnishings through a retail footprint three times larger than its nearest competitor. Because of their size, their unrivalled, vertically integrated model controls all processes, leaving no direct industry comparison.

Stanley Lifestyles Ltd IPO Objectives

Stanley Lifestyles Limited’s major goal is to invest in subsidiaries to create new stores, anchor stores, and remodel existing ones. Additionally, funding capital expenditures for machinery is critical.

Investment in certain Subsidiaries:
1. Opening of new stores by such subsidiaries under the formats “Stanley Level Next,” “Stanley Boutique,” and “Sofas & More by Stanley”: The company expects to use INR 9.01 crores from net proceeds to open 24 new stores in Delhi, Tamil Nadu, Telangana, and Maharashtra, catering to the luxury, premium, and mid-high categories.
2. Opening Anchor Stores by such Subsidiaries: The company intends to use INR 4 crores from the Net Proceeds to open three Anchor Stores in Delhi, Telangana, and Maharashtra through three subsidiaries, offering premium products at accessible costs.
3. Existing stores will be renovated under the formats of “Stanley Level Next,” “Stanley Boutique,” and “Sofas & More by Stanley” by such subsidiaries: Between fiscal years 2025 and 2027, the company intends to use INR 1 crore in net proceeds to remodel 15 existing stores in Delhi, Tamil Nadu, Telangana, Maharashtra, and Karnataka via five subsidiaries.
Funding the capital expenditure requirements for the purchase of new machinery and equipment by the company and its Material Subsidiary, Stanley OEM Sofas Limited:
Their company and Stanley OEM Sofas Limited want to invest 0.67 crore in Net Proceeds to purchase new machines and equipment for production facilities in Bengaluru. This investment intends to improve manufacturing capacity.
General corporate purposes: The remaining money will be used for general corporate reasons such as strategic initiatives, expansion, necessities, salaries, rent, IT improvements, raw materials, vendor services, electricity charges, and advertising expenses.

Stanley Lifestyles Ltd IPO Risks and Challenges

Stanley Lifestyles Limited faces several risks, including trademark registration delays, reliance on sofa sales in the face of competition, raw material supply disruptions, pricing volatility, and supplier payment defaults, all of which might have an impact on the company’s business and finances.

Despite the fact that they have entered into Assignment Deeds, the “Stanley” trademark is still registered in the name of the Promoter. Delays or breaches in registration or coexistence agreements may have an impact on their business and finances.
Their business is primarily reliant on sofa and recliner sales, and it is vulnerable to competition, raw material pricing, and shifting client tastes. Failure to adapt could result in inventory obsolescence and pricing pressure, compromising financial success.
Their operations rely on a steady supply of imported raw materials, particularly leather from Europe. The lack of long-term contracts exposes us to pricing volatility, and payment defaults to suppliers may interrupt operations.

Stanley Lifestyles Ltd IPO – Industry & Market Potential

Affluent households are expected to increase by 10% yearly, reaching 13 million by 2027, accounting for 55% of luxury consumption. UHNWIs are predicted to reach 19,000, as rising incomes drive discretionary expenditure.

Indian retail is moving toward premiumization, with discretionary retail expected to reach $381 billion by 2025. Rising discretionary spending will fuel demand for luxury products, with organized retail anticipated to account for 30% of the industry by 2027.

The luxury home interiors market, currently valued at US$3.8 billion, is predicted to grow to US$5.6 billion. Luxury products with distinct aesthetics and rare materials are in high demand due to affluent buyers’ desire for unique designs.

Stanley Lifestyles Limited IPO – Type of Offer

Stanley Lifestyles Limited has a fresh issue worth INR 200 crores and an offer to sell 337.02 crore shares by existing shareholders.

Fresh Issue: The corporation plans to raise funds by issuing additional shares, with the goal of collecting INR 200 crores. The corporation intends to use it to invest in new and current stores, machinery, and other corporate needs.
Offer for sale: The IPO includes an offer for sale worth INR 337.02 crores. The following are the details of the current shareholder, who is also the promoter selling the shares:

Name of the promoter selling shareholder	Maximum number of offered shares for sale (in millions)
Sunil Suresh	1,182,000
Shubha Sunil	1,182,000

Stanley Lifestyles Limited IPO Allotment Structure

According to SEBI regulations, Stanley Lifestyles Limited will allocate 50% to qualified institutional buyers (QIB), 35% to non-institutional investors (NII), and 15% to retail individual investors (RII).

● Qualified Institutional Buyers (QIB): According to SEBI regulations, Stanley Lifestyles Limited will allocate 50% to qualified institutional buyers (QIB), 35% to non-institutional investors (NII), and 15% to retail individual investors (RII).

● Non-Institutional Investors (NII): 35% of the shares will be reserved for non-institutional investors. These often include corporate entities or individuals who invest more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 15% of the shares will be allocated to retail individual investors. These individual investors apply for shares worth less than Rs. 2 lakhs.

Stanley Lifestyles Ltd IPO GMP

IPO OPEN TO CLOSE DATE	IPO PRICE	LATEST GMP	ESTIMATED LISTING GAIN
21 June to 25 June 2024	369	165	534 (44.72%)

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Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.

Brokerage firm Anand Rathi Research recommended ‘subscribe for long term’ in an IPO note, saying, “On the valuation front, at an upper band, the company is richly priced at a P/E of 60x post-issue of equity shares on an FY profits basis, and the company has no listed peers. We believe that industry tailwinds, brand recall, and business scalability provide opportunities for the company to increase its performance. We urge that the IPO be rated ‘Subscribe for Long Term‘.”

Stanley Lifestyles Limited IPO – FAQs

1. What Is The Allotment Date Of Stanley Lifestyles Limited?

The allotment date of the Stanley Lifestyles Limited IPO is June 26, 2024.

2. What Is the Price Band of the Stanley Lifestyles Limited IPO?

The price band of the issue is INR 351-369 per share.

3. What Is the Size of the Stanley Lifestyles Limited IPO?

Stanley Lifestyles Limited’s offer size is INR 537.02 crores, which includes a fresh issuance of INR 200 crores and an offer for sale of INT 337.02 crores. The company is looking for capital to invest in new and current stores, machinery, and general corporate reasons.

4. What Is the Listing Date of the Stanley Lifestyles Limited IPO?

The listing date of Stanley Lifestyles Limited’s IPO is June 28, 2024.