Mish Designs coming with IPO to raise Rs 9.76 crore

Mish Designs 

• Mish Designs is coming out with an initial public offering (IPO) of 8,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 122 per equity share. 
• The issue will open for subscription on October 31, 2023 and will close on November 2, 2023.
• The shares will be listed on SME Platform of BSE.
• The share is priced 12.2 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Aryaman Financial Services.
• Compliance Officer for the issue is Kruti Parekh.

Profile of the company

Its brand ‘MISH’ represents contemporary women's fashion label specializing in affordable western and indo-western wear with strong global digital presence and has been able to sell over 2.5 lakh product through E-Commerce platforms since Financial Year 2017-18. It have established strong network with prominent E-Commerce players such as Myntra, Nykaa Fashion, Ajio and Tata Cliq. It also sold its products on other e-platform like Namshi (through third party). It have and introduced its brand by identifying gaps in the under-served and high-growth dedicated towards women’s western wear category.

It is engaged in the process of fabrication of fabric into garments under the brand name ‘MISH’, ‘CURVES BY MISH’ in India. It exports its product currently to UAE under the brand name ‘ZOEY’. It offers collection of over 1000 trending designs to cater the diverse taste of its customer. The company offers varieties of products in Women’s wear segment such as Dresses, Gowns, Tops, Co-Ords, T-shirts, Trousers and Palazzos.

The company’s proficiency lies in understanding the specific requirement of its customers and based on which it design, procure fabrics, use color combinations, manufacture the garment, make live samples to understand the taste and trends all with an in-house design team at its manufacturing unit built around 10,000 sq. ft with a team of over 58 employees. It have a dedicated team to supervise the entire manufacturing process including selection of interlinings produced till dispatch of the goods to customers place, to assure product quality and customer satisfaction which remains its top priority.

Proceed is being used for:

• Funding working capital requirements.
• Funding branding and marketing initiatives.
• General corporate purposes.

Industry overview

India is among the top garment-manufacturing countries in the world. Indian textiles and apparel products have a history of fine craftsmanship across the entire value chain from fibre, yarn, and fabric to apparel with high global appeal. India’s cotton, silk, and denim are highly popular in other countries, and Indian apparel too has found success across fashion centres around the world. India is one of the largest consumers and producers of cotton with the highest acreage of 13.5 million hectares which is 38% of the global area under cotton cultivation. The Indian textile and apparel industry is highly diversified with a wide range of segments ranging from products of traditional handloom, handicrafts, wool, and silk products to the organized textile industry in India.

India’s textile and apparel market size is growing at a CAGR of 12% from $152 billion in 2021 to reach $225 billion by 2025. The industry is one of the biggest contributors to the economy with a 2% contribution to the gross domestic product (GDP) which is around $70 billion. It is also the second largest employer after agriculture, providing direct employment to 45 million people and 100 million people in the allied sector. Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat are the top textile and clothing manufacturing states in India.

The Asia-Pacific Economic Cooperation (APEC) was formed in 1978 and is the official body of apparel exporters in India. The primary objective of the council is to promote, advance, increase and develop the export of all types of ready-made garments in India. As the textile industry is crucial for India’s growth, the government of India has implemented several schemes for the growth of production and ease of trade The government has also approved the continuation of the Scheme for Rebate of State and Central Taxes and Levies on the Export of Garments and Made-ups (RoSCTL scheme) up to March 2024 to boost the export competitiveness of Indian apparel and made-ups. The Government will continue the RoSCTL scheme until it gets merged with the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme.

Pros and strengths

Online Business through prominent E-commerce platforms: Its products are sold through most popular and commonly used e-commerce trading platforms such as Myntra, Nykaa Fashion, Tata Cliq, Ajio and Tata Cliq. It also sold its products on other e-platform like Namshi (through third party). These virtual store fronts are designed with the intention of providing customers a positive shopping and brand experience, showcasing its products in an easy-to-navigate format, allowing consumers to browse from its 1000 varieties of products. In its experience, these virtual stores provide an efficient and effective E- distribution channel, which has proven to be a convenient option for its customer. It has sold over 5 lakh products through these channels.

Scalable Business Model: Its business model starts with manufacturing garments in sample quantity. Samples are then presented through online platforms for reviews and orders by its distribution channel. After the study of customer’s demand and taste its team works out with finalizing the decision for bulk production. This comprises of optimum utilization of its designs, fabrications, processing, developing linkages with quality raw materials and achieving consequent economies of scale.

Cost effective production: The key to achieve success in this industry is highly dependent on two factors -timely fulfillment of the orders and cost effective production. The company has taken various steps in order to ensure adherence to timely fulfillment. It is in the fashion Industry and fashion is time bound and any delay in meeting deadlines results in loss of business. The company constantly endeavors to implement an efficient procurement policy for inputs required for production so as to ensure cost efficiency in procurement which in turn results in cost effective production. It also bring consistency in quality and service standards.

Risks and concerns

Dependent on few suppliers for raw materials: The Company is dependent on a few suppliers for procuring the raw materials for manufacturing of its products and it does not currently have long term contracts or exclusive supply arrangements with any of its vendors. Any failure of the supplier to deliver these raw materials in the necessary quantities or to adhere to delivery schedules or specified quality standards and technical specifications would adversely affect its business operations and its ability to deliver orders on time and at the desired level of quality. As a result, it may lose customers and incur liabilities for failure to execute orders, which could have a material adverse effect on its business financial condition and results of operations.

Dependent on third party transportation providers: It relies substantially on third party transportation providers for the supply of its products to its customers. Strikes / non-availability of transportation could have an adverse effect on its ability to deliver the same to its customers. Increase in transportation costs or unavailability of transportation services for its products, as well the extent and reliability of Indian infrastructure may have an adverse effect on its business, financial condition, results of operations and prospects.

Highly competitive industry: The women wear industry is the fast fashion industry. Its products compete with local retailers, non-branded Products, economy brands and products of other established brands. Competition may result in pricing pressures, reduced profit margins or lost market share or a failure to grow its market share, any of which could substantially harm its business and results of operations. It strives to ensure that its products remain in line with current market trends yet affordable for its customers. If it were to face competitive pricing from its competitors and the aforementioned measures or other steps it takes fail to maintain or increase its margins and revenues from product sales, its business, results of operations and financial condition may be adversely affected.

Outlook

The company is engaged in the process of fabrication of fabric into garments under the brand name ‘MISH’, ‘CURVES BY MISH’ in India. It exports its product currently to UAE under the brand name ‘ZOEY’. It offers collection of over 1000 trending designs to cater the diverse taste of its customer. The company offers varieties of products in Women’s wear segment such as Dresses, Gowns, Tops, Co-Ords, T-shirts, Trousers and Palazzos. On the concern side, it operates in a competitive atmosphere. It competes with other brands on the basis of product range, product quality and product price including factors, based on reputation, regional needs and customer convenience. While these factors are key parameters in customer’s decisions matrix in purchasing goods; product range, product quality and product price is often the deciding factor in most deals.

The company is coming out with an IPO of 8,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 122 per equity share to mobilize Rs 9.76 crore. On performance front, its total income increased by 52.18%, from Rs 730.70 lakh in fiscal 2022 to Rs 1111.95 lakh in fiscal 2023. Profit after Tax increased by 1033.40% from Rs 5.36 lakh in fiscal 2022 to Rs 60.75 lakh in fiscal 2023. Meanwhile, by owning brand MISH, CURVES BY MISH and ZOEY, it is determined to cater the demands of women’s western wear through multi e-commerce platforms. It aims to deepen its connection with its customers and extend buying opportunities beyond the casual wear to other occasions. It has even started indo-western wear for trending young look designed for women’s different choices. It is establishing its presence through e-channel network and its website with attractive pricing initiatives and an increasing blend of product designs at affordable prices. Through its focused marketing campaigns, it aims to establish a bond with its customers at an emotional level and project an underlying core message with shared values through distinctive marketing, advertising and customer engagement initiatives.