Indian primary market activity is gaining pace and another key brand has announced its public offering. Indian fitness and lifestyle platform Cult.fit has filed its Draft Red Herring Prospectus (DRHP) with SEBI.
The IPO is a book-build issue comprising the issuance of fresh equity worth Rs 950 crore and an offer for sale component of 17.8 crore shares of Re 1 each. Via the offer the fitness platform aims to expand its base, repay its debt, invest in its subsidiaries and so on.
While, the price band of the issue and the launch date is yet to be announced, here are 3 key must know details that investors should track
1. Cult.fit IPO: Issue size and BRLMs
The company will raise Rs 950 crore via the issuance of fresh equity shares, and investors will offload over 17.8 crore equity shares of Re 1 each. Axis Capital, Goldman Sachs (India), Jefferies India, JM Financial, and Morgan Stanley India are the investment banks managing the IPO.
KFin Technologies is the registrar to the issue. As per Cult’s DRHP, it may consider a Pre-IPO placement aggregating up to Rs 190 crore.
2. Cult.fit IPO objectives
Of the total Rs 950 crore fresh proceeds, the company will allocate Rs 276.6 crore towards funding the capital expenditure for setting up its new Cult centres. For payments related to lease, rent, license and fitness centres the firm will deploy proceeds worth Rs 217.5 crore.
The fitness platform will utilize Rs 120 crore towards repayment and prepayment of its outstanding borrowings, and for the purpose of business promotion and advertising it will deploy Rs 75 crore.
Cult. fit will invest Rs 23.40 crore in its subsidiary, Cultsport and this amount will also be deployed towards setting up the company’s new exclusive brand outlets. The remaining capital will be utilized for general corporate purposes, the company said in its DRHP.
3. Cult.fit IPO: Key Risks
Howwver, one must carefully consider the risks associated with the IPO.
Risks pertaining to customer retention, negative brand marketing, infringement of intellectual property, fluctuations in imports, and continued losses in the company’s subsidiaries may adversely affect its business operations.
Also, the DRHP highlighted that reliance on fitness centres for revenue generation, disturbance in sales of fitness products, disruptions in technology and infrastructure and risks related to regulatory and legal compliances need to be monitored.
About the company
Cult. fit offers fitness and lifestyle services and products. The company operates a large number of fitness centres across many cities. It is headquartered in Bengaluru, Karnataka.
