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30 September 2023

C P S Shapers IPO: Shaping Up the Future of Shapewear

Introduction:

C P S Shapers Limited, established in 2012, has made a mark in the clothing industry through its expertise in manufacturing shapewear for both men and women. With a motto that encourages you to "Shape up with Confidence," the company markets its products under the brands Dermawear and YDIS (Your Dress Is Shapewear). C P S Shapers offers a wide range of shapewear products, including Saree Shapewear, Mini Shaper, Sports Bra, Tummy Reducer, Slimmer, Active Pants, and more. The company operates through online and offline channels and has a distributor network covering 28 states and 8 union territories in India. It also exports its products to countries like Canada, Germany, Australia, the United Kingdom, and the United States.

IPO Overview:

The C P S Shapers IPO, a fixed-price issue of Rs 11.10 crores, is entirely composed of a fresh issue of 6 lakh shares. The IPO subscription period commenced on August 29, 2023, and concluded on August 31, 2023. The allotment process was finalized on September 5, 2023, and the shares made their debut on NSE SME on September 7, 2023. Priced at ₹185 per share, the IPO required a minimum lot size of 600 shares, translating to a minimum investment of ₹111,000 for retail investors. High Net Worth Individuals (HNIs) had the option to apply for a minimum of 2 lots (1,200 shares), amounting to ₹222,000.

Key Players:

Shreni Shares Private Limited took on the role of the book-running lead manager for the C P S Shapers IPO, while Bigshare Services Pvt Ltd acted as the registrar for the issue. Shreni Shares served as the market maker.

Stock Performance:

As of September 27, 2023, C P S Shapers Limited's stock (Arrow) was trading at ₹468.00, reflecting a 5.17% increase. The stock had an open of ₹449.00, a high of ₹470.00, a low of ₹448.00, and a previous close of ₹445.00. The total traded value was 8,400 shares.

Ownership Structure:

C P S Shapers Limited demonstrated solid financial performance in recent years, with impressive growth in assets, revenue, and profits. As of March 31, 2023, the company's total assets stood at ₹1,751.20 lakhs, supported by robust revenue generation. Profits after tax showed remarkable improvement, and the company maintained a strong net worth of ₹175.12 lakhs, along with reserves and surplus of ₹125.12 lakhs. Total borrowings remained at ₹1,043.66 lakhs.

Performance Indicators:

Key performance indicators for the C P S Shapers IPO included a P/E (Price-to-Earnings) ratio of 11.28 and a Market Capitalization of ₹38.85 crores.

Objectives of the Issue:

The net proceeds from the IPO were allocated for the following purposes:

1. Purchase of Plant and Machinery at the existing manufacturing facility.
2. Purchase of a commercial vehicle
3. Funding capital expenditure requirements for the purchase of Solar Power Systems.
4. Upgradation of existing IT Software at the manufacturing facility and registered office.
5. Repayment or prepayment, in full or in part, of borrowings availed by the company from banks and financial institutions.
6. Funding working capital requirements of the company.
7. General corporate purposes.

Expert Opinion:

Noted that C P S Shapers Limited performed well for the reported periods. However, it operates in a highly competitive and fragmented segment. Based on FY23 earnings, the issue appeared reasonably priced. The relatively small equity post-IPO indicated a longer gestation period for migration to the mainboard. Well-informed investors were encouraged to consider parking funds for long-term rewards.

Subscription Status:

The C P S Shapers IPO garnered significant interest, achieving an exceptional subscription rate of 253.97 times as of August 31, 2023. Retail investors showed remarkable enthusiasm with a subscription rate of 301.03 times, while other categories also witnessed strong participation.

Conclusion:

C P S Shapers Limited has established itself as a reputable player in the shapewear industry, offering a wide range of products to enhance the confidence of its customers. The IPO underscores the company's ambitions for growth and expansion. However, potential investors should thoroughly assess market dynamics and competitive forces in the industry before making investment decisions.

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