The Indian furniture industry is entering a sweet spot in the upcoming decade. The per capita GDP growth is one of the drivers for new preferences for premium furniture. The pacing lifestyle innovations in mainly the metro cities have created a huge opportunity for interior and furniture market players.
Moreover, the players in this segment have very narrow (focused) outreach or fragmented local presence.
Stanley Lifestyles is an Indian super-premium and ultra-luxury furniture brand. The company has a wide range of products, from sofas to cabinets and other furniture products for homes and offices. Its IPO is open for investors and is nearly 4 times subscribed on its penultimate day.
The modern lifestyle has attractions towards aesthetic and luxurious elements. A similar choice is reflected in the interiors of the houses. People prefer customisation where brands like Stanley Lifestyles could make their mark.
About Stanley Lifestyles Ltd.
Stanley Lifestyles Ltd is a designer and manufacturer of super-premium, luxury, and ultra-luxury types of furniture for home and office setups. The company was established in 2007. Stanley Lifestyles Ltd is the 4th largest home furniture company in India as of FY 2023. Moreover, its wide retail presence is nearly three times larger than other organised and unorganised players. It operates mainly in 3 segments as mentioned below:
- Automotive interiors – The leather interiors, such as seatings, are provided by the company to original equipment manufacturers (OEMs).
- B2B sales: Its premium and luxurious/ultra-luxurious office category furniture provides products to corporate offices, hotels, airports, etc.
- Contract manufacturing: The company manufactures as per need specific contracts of the clients.
Its two manufacturing plants are located in Bengaluru, Karnataka. The Stanley Lifestyles IPO aims to establish its strong presence in the market, tap the potential growth, and raise funds for its novel expansion plans.
It is a retail company with store divisions as follows:
| Stores | COCO | FOFO |
|---|---|---|
| Stanley Level Next(Ultra-luxury, 5 lakh & Above) | 6 | 1 |
| Stanley Boutique(Luxury, 3 lakh to 5 lakh) | 10 | 4 |
| Sofas & more by Stanley(Super-Premium, 1.5 lakh to 3 lakh) | 19 | 19 |
| Others (Below 1.5 lakh) | 3 | – |
| Total | 38 | 24 |
The COCO stores are operated by the subsidiaries of the company namely- ABS Seating Pvt Ltd, Stanley OEM Sofas Ltd, Stanley Retails Ltd, Scheek Home Interior Ltd, Sana Lifestyles Ltd, Shrasta Decor Pvt Ltd, Staras Seating Pvt Ltd.
Know more: What Is Initial Public Offer?
Details of Stanley Lifestyles Ltd IPO
The initial public offering (IPO) of Stanley Lifestyles Ltd aims to raise ₹537.02 crores by offering 1.45 crores equity shares to retail, qualified institutional, and non-institutional investors.
The RHP of Stanley Lifestyles Ltd IPO was filed on June 13, 2024.
| IPO price range | ₹351-₹369 per share |
| Lot size | 40 shares |
| Fresh Issue | ₹200 crores |
| Offer-for-sale | ₹337.02 crores |
| IPO Opening Date | June 21, 2024 (Friday) |
| IPO Closing Date | June 25, 2024 (Tuesday) |
| Listing Date | June 28, 2024 (Friday) |
Source: RHP Stanley Lifestyles Ltd.
Minimum Investment for retail investors is ₹14,760. Axis Capital Ltd, ICICI Securities Ltd, SBI Capital Markets Ltd, and JM Financials Ltd are the book-running lead managers for this issue. KFin Technologies Ltd is in charge of registrations.
June 24, 2024, is day 2 for IPO. This issue is subscribed by nearly four times the issue size. The retail investor portion for the IPO is subscribed by 5.12 times, the NII portion 6.08 times, and the QIB 0.31 times. Due to this, the grey market premium for Stanley Lifestyles share is ₹172, indicating that the prospects are very positive for this IPO.
Read more: Types of IPO: A complete guide to IPO investing
Key financials
Here are some of the crucial consolidated financial details of Stanley Lifestyles Ltd.:
(Amount in crores)
| Particulars | For nine months till December 2023 | FY 2022-23 | FY 2021-22 |
| Net worth | 237.21 | 216.5 | 199.76 |
| Total revenue | 322.29 | 425.62 | 297.75 |
| Net profit | 18.50 | 35.14 | 23.7 |
| Total borrowings | 30.90 | 9.37 | 6.09 |
| Operating cash flow | 125.71 | 679.71 | 285.23 |
| Return on equity | 7.92% | 16.29% | 11.81% |
Source: RHP Stanley Lifestyles Ltd.
In terms of investing, the financial indicators for the company are very positive, with growth in the return to equity and net worth. The net profit margin is 8.2% & 7.8% for FY23 & FY22 respectively.
Being a manufacturer, COGS accounts for nearly 48% of the revenue. The efficiency of the company’s operation is visible by a growing ROCE ratio that currently stands at 16.63%.
The luxurious home furniture industry is estimated to grow at nearly 15% by 2027, which presents immense growth opportunities for the company. The raised funds will also help in the renovation of existing facilities and the set up of facilities for increasing revenue for the company.
Also read: NFO or IPO – What do you think is the better option?
SWOT analysis
| STRENGTH | WEAKNESS | OPPORTUNITY | THREAT |
| Strong product range from sofas, and recliners to other home & office furniture | Major reliance of 57% on sofas and recliners for revenue | Under penetration in luxury households | 60% sales from Karnataka only |
| 4th largest market player in the premium & luxury furniture | Concentration in few suppliers for raw materials such as leather | Indian home interior market to grow at 15% till 2027 | 63% revenue from COCO, operated by subsidiaries |
| Expansion and renovation plans instil confidence | Expansion plans in Delhi, Telangana & Maharashtra | Trademark for name ’Stanley’ yet not registered |
Bottomline
Stanley Lifestyles IPO is an excellent opportunity for investors to invest in the growth trajectory of the Indian luxury furniture market. The ‘Made in India’ brand makes it reliant enough and provides an opportunity to penetrate the untapped organised Indian market.
In terms of financial position, the company is well-placed and has potential growth opportunities for its investors. The company’s IPO is also gaining momentum in the grey market as on day 2 of the offer.
Stanley Lifestyles has immense potential to handle its weaknesses and work more efficiently towards providing value to its stakeholders.
