Stanley Lifestyles' shares made a good stock market debut on Friday, trading at Rs 499, a 35% premium to their issue price of Rs 369 on the BSE. On the National Stock Exchange, the stock was listed for Rs 494.95, up 34% from its issue price. The stock then rose to a high of Rs 510, up 38% from its IPO price. At 10:02 a.m., the stock was trading at Rs 497.95, having hit a low of Rs 490 in intraday dealings on the BSE. The NSE and BSE traded over 9 million shares in total.
Stanley Lifestyles' initial public offering (IPO) had a strong reaction from investors, with the issue subscribed for 97.16 times. Qualified institutional buyers provided the most support among participants, bidding 215.62 times the portion set aside for them, followed by non-institutional investors (high net worth individuals), who purchased 121.42 times the allotted quota, and retail investors, who purchased 19.08 times the reserved amount.
Stanley Lifestyles has been a key player in the furniture market for over a decade, serving consumers ranging from super premium to ultra-luxury. While it has grown significantly in market share over time, it has a long-term goal of being available to all client segments at all price points. Between FY21 and FY23, Stanley Lifestyles achieved a CAGR of 46 percent for revenue and 67 percent for EBITDA. It anticipates organic growth of 25-30% over the medium term. Based on its 9MFY24 annualized performance, analysts at Nirmal Bang Securities predict flat revenue growth in FY24E. In terms of profitability ratios, the company's ROE and ROCE stood at 11.8 percent and 9.6 percent for the annualized 9MFY24, respectively.
Stanley Lifestyles intends to strengthen its localisation in terms of raw material sourcing, which is currently sourced from Europe and SouthEast Asia. Currently, 20% of its raw materials come from the domestic market, which is expected to progressively increase to 70-80% over the next few years. This will have a beneficial influence on the company's total earnings, the brokerage firm stated in its IPO report.
Stanley Lifestyles has evolved its goods over the previous few years, operating on a large scale while retaining a high degree of profitability across the mass, luxury, and ultra luxury segments. According to analysts at Reliance Securities, the second home trend will continue to drive development due to improved lifestyles and an increasing number of households, and management is committed to expanding market share and client base in the next few years.
According to brokerage firm Geojit Financial Services, Stanley Lifestyles benefits from excellent brand awareness, a manu-retail strategy, the expansion of new locations, an increasing number of affluent households, and positive real estate trends. These variables are projected to contribute significantly to the company's future success.
Stanley Lifestyles is to spend Rs 90 crore to open 24 additional stores between FY25 and FY27, which will greatly boost the company's revenue. The luxury/super-premium furniture and home goods industry is expected to increase at a 34 percent CAGR from USD 1.5 billion to USD 4.8 billion between FY23 and FY27. State Bank of India Securities believes Stanley is well-positioned to capitalize on the solid growth opportunities in the premium furniture sector.
