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Koovs Files For £22M IPO On London’s AIM Exchange; Restructure, Shareholding

KOOVS-Fashion-logo

Koovs plc (Koovs) has filed for an IPO on AIM (Alternative Investment Market), a sub-market of the London Stock Exchange that offers smaller companies a more flexible regulatory system than applicable to the main market. (Hat tip – TechCircle)

Through this offering, Koovs is looking to raise £22 million (around Rs 224.5 crore) and will be offering 24,110,719 ordinary Shares of 1 pence (around Re 1) each at an issue price of 150 pence (around Rs 153) each. The company shares are expected to start trading from Monday (March 10, 2014).

This follows the company’s plans to go public last November by listing on AIM. An FT report had then said that Koovs owners plan to float about 35% of the company to raise £22 million.The remainder will be split between the Nahata family, Koovs chairman Waheed Alli and the company’s management.

As per the filing, Koovs Marketing Consulting Pvt Ltd (Koovs India) was set up in May 2010 as a general e-commerce business. In August 2011, Infotel E-Commerce Private Limited, a company controlled by the Nahata family, acquired a controlling interest in Koovs India start focusing on the sale of mobile phones and other electronic goods. Its worth noting that Nahata used to own Infotel Broadband before it was bought by Reliance Industries in June 2010 who later rebranded it as Reliance Jio Infocomm.

In September 2012, Koovs eventually pivoted to fashion products and fashion-related accessories when Silvergate Retail Limited (now known as Koovs plc), founded by Lord Waheed Alli and Robert Bready, started offering Koovs India with consultancy services in fashion design for e-commerce business.

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Changes in the company structure

Following the completion of IPO, Koovs plc will subscribe for shares in Koovs India and become the majority owner of Koovs India with 57.5% stake. Since foreign direct investment is not allowed in e-commerce in India, Koovs India will now operate as a wholesale trading entity supplying branded and private label fashion products only to Marble E-retail Private Limited.

Marble E-retail Private Limited which is independently owned and managed will now operate the Koovs.com portal under license from Koovs India and act as the retailer for consumers. The combined business will have operations both in the UK and India and Koovs.com will offer branded and private label apparel products targeted towards young consumers in India.

Shareholding

Lord Waheed Alli currently owns 49.9% stake in the company while Exicom Tele-Systems (Singapore), a company related to Anant Nahata, owns 38.4% stake and Robert Bready owns 8.9% stake.

Post IPO, Alli will own 19.6% stake, Exicom will own 15% stake and Bready will own 3.5% stake. investors BlackRock Fund Managers, Hargreave Hale, Henderson Global Investors, JO Hambro Capital Management and JPMorgan Asset Management (UK) will have 7.1% stake each while Smith & Williamson Investment Management will have 5.9% stake in the company.

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Koovs Shareholding

The filing also points koovs.com/corporate for more company numbers, however it doesn’t work at the time of writing this article.

Competition

In India, Koovs competes with dozens of online fashion retailers such as:

– Myntra which recently raised $50 million from PremjiInvest and others
– Flipkart which launched a lifestyle fashion label Flippd
– Rocket Internet-backed Jabong which recently closed a multi-hundred million dollar investment from a series of investors
– eBay-backed Snapdeal which raised $133.7 million investment last month.

Other players include Unilazer Ventures-backed Zovi, Ant Farm’s* Stylista and Fashionara among others.

*Disclosure: Ant Farm is an advertiser with Medianama

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