(By Vikas SN & NT Balanarayan)
It opened at 180 pence per share, up 20% from issue price and during the day it went up to a peak of 190 pence per share, up 26.7% from the issue price and a low of 169 pence, still 12.7% higher than the issue price. At the time of writing this article, it is trading at 193 pence, a 28.7% increase from the offer price.
Through this IPO, Koovs has raised £22 million by offering 24,110,719 ordinary shares of 1 pence each at an issue price of 150 pence each, which represents for 60.8% of the company’s total issued share capital. After deducting underwriting discounts and other expenses, Koovs gets around £20.4 million from the offering. At 184 pence per share, its 24,110,719 shares would value the company at £44.36 million, up from its pre-IPO market cap of £36.2 million. However, note that the value of the holding will change with market fluctuations.
From the funds raised, Koovs plans to use approximately £16.5 million to subscribe for 165,986,056 ordinary shares of Koovs India (Koovs Marketing Consulting Private Limited), which represents 57.5% stake in the company, thereby valuing Koovs India at £28.7 million. The company notes that the new investors at the IPO will own 35% stake of Koovs India on a see-through basis (Read more on Koovs restructuring and shareholding here).
The rest of the funds will be used for the company’s general working capital requirements to build a broader product range; expand its marketing activities and to fund Koovs anticipated operating losses through to breakeven and beyond.
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. Note that Nahata family 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.
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 and has raised $541 million investment until now.
– 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