Sequoia Capital-backed Genesis Colors is looking to launch its IPO in the next financial year. According to a Mint report, the private equity backed retailer of premium apparel and accessories brands is talking to investment banks for the IPO which will be a mix of fresh shares and a sale by existing investors. In total, Genesis Colors IPO is likely to raise INR6-6.5 billion (INR600 – 650 crore).
“The group has been in talks with investment banks such as Edelweiss and Credit Suisse for a while now. Formal mandates are expected to be given out soon and the IPO process is expected to be kick-started shortly,” the report cited a source as saying.
Established in 2001 by Sanjay Kapoor, Jyoti Narula and Puneet Nanda, Genesis Colors is the owner of luxury fashion brands such as Satya Paul and Bwitch. The company also distributes premium international brands such as Paul Smith, Bottega Veneta, Jimmy Choo and Armani through its subsidiary Genesis Luxury Fashion. Genesis Colors has a retail network of around 120 single-brand boutiques, multi-brand stores and shops-in-shops across more than 20 cities. Apart from operating the stores directly, Genesis Colors has also adopted the franchise model.
Private equity investors Sequoia Capital, Mayfield, and Henderson Private Equity may sell their partial shareholding through Genesis Colors IPO. While Sequoia Capital and Mayfield invested in 2008, Henderson Private Equity followed in the subsequent year. Sequoia holds nearly 20% in Genesis Colors while Henderson Private Equity and Mayfield own about 13% and 8.5% respectively. Additionally, L Capital Asia – the private equity arm of LVMH Moet Hennessy Louis Vuitton SE – holds about 40% in Genesis Luxury Fashion.
According to data filed with Registrar of Companies (RoC), Genesis Colors’ consolidated revenue stood at INR4.2 (INR426.8 crore) in FY2015 while losses were at INR84.7 million (INR8.47 crore).
India’s red hot IPO market
So far, 12 companies have tapped the IPO market in India, raising a total of INR81.88 billion (INR8,188 crore), building on last year’s solid performance when 21 companies raised INR136.14 billion (INR13,614 crore) funds.
Continued buoyancy in the markets is prompting more companies to consider bringing IPOs. The trend is prominent in companies backed by private equity players which are looking for an exit. Out of the 12 IPOs so far this year, as many as nine included an offer for sale (OFS) component from existing investors.