Campus Activewear IPO impact? Footwear companies stocks surge up to 20% intraday - know what experts say

As an initial public offer (IPO) of Campus Activewear (Campus) opened for subscription on Tuesday, the footwear companies’ stocks on exchanges have come into focus, surging up to 20 per cent on the BSE intraday.

Individually, shares of Khadim India jumped most almost 20 per cent to Rs 278 per share, followed by Liberty Shoes up almost 13 per cent to Rs 177.95 per share and Superhouse gained over 11 per cent to Rs 209 per share on the BSE intraday.

Other footwear companies’ stocks such as Mirza International jumped 6 per cent to Rs 230 per share, followed by Metro Brands up almost 4 per cent to Rs 588.75 per share and Bata India, as well as Relaxo Footwears gained almost 2 per cent each to Rs 1948 and Rs 1123.7 per share on the BSE. 

Giving subscribe rating on Campus IPO, Zee Business Managing Editor Anil Singhvi recommended to apply for reasonable listing gains with a long-term approach. 

He said, “The Athleisure footwear company is a strong brand and commands a market presence. It also boasts of strong demand and a growth outlook and has strong finances with free cash flow.”

Campus Activewear is the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021. The company introduced its brand ‘CAMPUS’ in 2005 and is lifestyle-oriented sports and athleisure footwear company that offers a diverse product portfolio for the entire family.

“The post-issue P/E of ~78x based on FY22 annualized earnings indicates that the valuations are quite steep,” Yesha Shah, Head of Equity Research, Samco Securities said in her IPO note.

According to brokerage firm Centrum Broking, “Indian footwear industry is a long-term structural story with multiple growth drivers in place. India’s per capita footwear at 1.9x is well below global per capita of 3x and developed countries (US, UK) per capita of 7x.”

The footwear industry grew a healthy CAGR of 9 per cent over FY15-20 before being disrupted during the pandemic and category-wise sports and athleisure are expected to grow at double the industry rate, the brokerage added.

"Footwear stocks made a comeback today as the Rs 550 billion footwear market in India is witnessing consumerism once again aided by both Value for Money and Aspirational brands,” S Ranganathan, Head of Research at LKP Securities said in a note.

 The sector is likely to see double-digit growth over the next few years aided by very low per capita consumption and should help the half a dozen listed footwear entities gain market share, he added.