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Campus Activewear Limited - Prospectus | https://www.sebi.gov.in/filings/public-issues/jun-2022/campus-activewear-limited-prospectus_59815.html | https://www.sebi.gov.in/sebi_data/attachdocs/jun-2022/1655719379046.pdf | (vi)
Percentage Percentage
Date of No.of | Face | Issue Pricey | of pre- Pe
Allotment/ . 0 0! | value per | Transfer Price | Offer Bel aed
Nature of transaction | equity - 7 . Offer equity
Transfer / equity | per equity equity
at shares share
Transmission share (2) | _ share (3) share .
7 capital
capital
corporate action initiated by our Company in this regard, the sub-division of equity shares was effective from
November 23, 2021.
Sub-total (A) 52,307,692 17.19% 17.19%
(B)_QRG Enterprises Limited
September _1, | Private placement 1,373 10 1,68,500 0.00% 0.00%
2017
September 1,|Transfer from Nikhil] 2,440 10 1,68,500 0.00% 0.00%
2017 Aggarwal
September 27, | Bonus issue 5,875,833 10 - 3.86% 3.86%
2019
Each equity share of our Company with a face value of € 10 each was sub-divided into two Equity Shares with
a face value of % 5 each, pursuant to a Shareholders’ resolution dated November 9, 2021. Pursuant to the
corporate action initiated by our Company in this regard, the sub-division of equity shares was effective from
November 23, 2021.
Sub-total (B) 11,759,292 3.86% 3.86%
(©_RAJIV GOEL
September 1,| Transfer from Nikhil] 60 10 1,68,500 0.00% 0.00%
2017 Aggarwal
September 27, | Bonus issue 92,460 10 3 0.06% 0.06%
2019
Each equity share of our Company with a face value of € 10 each was sub-divided into two Equity Shares with
a face value of % 5 each, pursuant to a Shareholders’ resolution dated November 9, 2021. Pursuant to the
corporate action initiated by our Company in this regard, the sub-division of equity shares was effective from
November 23, 2021.
Sub-total (C) 185,040 0.06% 0.06%
(D) RAJESH KUMAR GUPTA
September 1,] Transfer from Nikhil] 119 10 1,68,500 0.00% 0.00%
2017 Aggarwal
September 27, | Bonus issue 183,379 10 = 0.12% 0.12%
2019
Each equity share of our Company with a face value of € 10 each was sub-divided into two Equity Shares with
a face value of % 5 each, pursuant to a Shareholders’ resolution dated November 9, 2021. Pursuant to the
corporate action initiated by our Company in this regard, the sub-division of equity shares was effective from
November 23, 2021.
Sub-total (D) 366,996 0.12% 0.12%
Grand total (A+B +C+D) 64,619,020 21.23% [21.23%
All the Equity Shares held by our Promoters were fully paid-up on the respective dates of allotment or
acquisition, as applicable, of such Equity Shares.
(vii) As on the date of this Prospectus, none of the Equity Shares held by our Promoters are pledged.
(viii) Except as set out under “ - Details of Shareholding of our Promoters and members of the Promoter Group
(ix)
@
in the Company - Build-up of the Promoters’ shareholding in our Company”, none of the members of the
Promoter Group, the Promoters, the Directors of our Company, nor any of their respective relatives have
purchased or sold any securities of our Company during the period of six months immediately preceding the
date of this Prospectus.
There have been no financing arrangements whereby our Promoters, members of the Promoter Group, our
Directors, or their relatives have financed the purchase by any other person of securities of our Company
during a period of six months immediately preceding the date of the Draft Red Herring Prospectus, Red
Herring Prospectus and the date of this Prospectus.
Details of lock-in of Equity Shares
Details of Promoter’s contribution locked in for eighteen months
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Pursuant to Regulations 14 and 16 of the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted
post-Offer Equity Share capital of our Company held by the Promoters shall be locked in for a period of 18
months as minimum promoters’ contribution from the date of Allotment (“Promoters’ Contribution”), and
the Promoters’ shareholding in excess of 20% of the fully diluted post-Offer Equity Share capital shall be
locked in for a period of six months from the date of Allotment. The lock-in of the Promoters’ Contribution
would be created as per applicable laws and procedures and details of the same shall also be provided to the
Stock Exchanges before the listing of the Equity Shares.
Details of the Equity Shares to be locked-in for 18 months from the date of Allotment as Promoters’
Contribution are set forth in the table below:
Percentage
Issue/ ofthe pone | Date up to
Name of Date of ae No.of | Face | @cauisition ae of | Offer fully Vg ie
the allotment of the |_® equity | Value | Price Per quity | “diluted quity
Promoter | Equity Shares* |“@"S2°} shares | () Coty | Be) || ety |e
tion share | locked-in ay | subject to
®@ capital lock-in
(ye
a September 27, | Bonus | 98,624,00 November
Krishan ane oe ee 10” Nil} 60,865,300 | 20.00% | NSS
Agarwal
* All the Equity Shares were fully paid-up on the respective dates of allotment or acquisition, as the case may be, of such Equity
Shares.
Subject to finalisation of Basis of Allotment.
Each equity share of our Company with a face value of = 10 each was sub-divided into two Equity Shares with a face value of @ 5
each, pursuant to a Shareholders’ resolution dated November 9, 2021. Pursuant to the corporate action initiated by our Company
in this regard, the sub-division of equity shares was effective from November 23, 2021.
Our Promoters have given consent to include such number of Equity Shares held by them as may constitute
20% of the fully diluted post-Offer Equity Share capital of our Company as Promoters’ Contribution. Our
Promoters have agreed not to dispose, sell, transfer, charge, pledge or otherwise encumber, in any manner,
the Promoters’ Contribution from the date of filing the Draft Red Herring Prospectus, until the expiry of the
lock-in period specified above, or for such other time as required under SEBI ICDR Regulations, except as
may be permitted in accordance with the SEBI ICDR Regulations.
Our Company undertakes that the Equity Shares that are being locked-in are not and will not be ineligible
for computation of Promoters’ Contribution in terms of Regulation 15 of the SEBI ICDR Regulations. In
this connection, we confirm the following:
(i) The Equity Shares offered for Promoters’ Contribution do not include Equity Shares acquired in the
three immediately preceding years (a) for consideration other than cash involving revaluation of assets
or capitalisation of intangible assets; or (b) resulting from a bonus issue of Equity Shares out of
revaluation reserves or unrealised profits of our Company or from a bonus issuance of equity shares
against Equity Shares, which are otherwise ineligible for computation of Promoters’ Contribution
(ii) The Promoters’ Contribution does not include any Equity Shares acquired during the immediately
preceding one year at a price lower than the price at which the Equity Shares are being offered to the
public in the Offer.
(iii) Our Company has not been formed by the conversion of a partnership firm or a limited liability
partnership firm into a company in the preceding one year and hence, no Equity Shares have been
issued in the one year immediately preceding the date of this Prospectus pursuant to conversion from a
partnership firm or a limited liability partnership firm; and
(iv) The Equity Shares forming part of the Promoter’s Contribution are not subject to any pledge.
Details of Equity Shares locked-in for six months
Pursuant to the SEBI ICDR Regulations, the entire pre-Offer capital of our Company (including those Equity
Shares held by our Promoters in excess of the Promoters’ Contribution) shall be locked-in for a period of six
months from the date of Allotment, except for (i) the Equity Shares Allotted pursuant to the Offer for Sale;
(ii) any Equity Shares held by the eligible employees (whether currently employees or not and including the
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(iv)
10.
11.
legal heirs or nominees of any deceased employees or ex-employees) of our Company which have been
allotted to them under 2018 ESOP Scheme and 2021 ESOP Scheme, prior to the Offer, except as required
under applicable law, (iii) any Equity Shares held by a VCF or Category I AIF or Category II AIF or FVCI,
as applicable, provided that such Equity Shares shall be locked in for a period of at least six months from the
date of purchase by such shareholders, and (iv) as otherwise permitted under the SEBI ICDR Regulations.
Further, any unsubscribed portion of the Offered Shares will also be locked in, as required under the SEBI
ICDR Regulations.
Lock-in of Equity Shares Allotted to Anchor Investors
50% of the Equity Shares Allotted to Anchor Investors in the Anchor Investor Portion shall be locked in for
a period of 90 days from the date of Allotment, while the remaining Equity Shares Allotted to Anchor
Investors in the Anchor Investor Portion shall be locked in for a period of 30 days from the date of Allotment.
Other requirements in respect of lock-in
(i) As required under Regulation 20 of the SEBI ICDR Regulations, our Company shall ensure that the
details of the Equity Shares locked-in are recorded by the relevant depository.
(ii) Pursuant to Regulation 21 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and
locked-in, as mentioned above, may be pledged as collateral security for a loan with a scheduled
commercial bank, a public financial institution, Systemically Important Non-Banking Financial
Company or a deposit accepting housing finance company, subject to the following:
(a) With respect to the Equity Shares locked-in for six months from the date of Allotment, such pledge
of the Equity Shares must be one of the terms of the sanction of the loan.
(b) With respect to the Equity Shares locked-in as Minimum Promoter’s Contribution for 18 months
from the date of Allotment, the loan must have been granted to our Company for the purpose of
financing one or more of the objects of the Offer, which is not applicable in the context of this
Offer.
However, the relevant lock-in period shall continue post the invocation of the pledge referenced above,
and the relevant transferee shall not be eligible to transfer the Equity Shares till the relevant lock-in
period has expired in terms of the SEBI ICDR Regulations.
(iii) In terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and
locked-in, may be transferred to any member of our Promoter Group or a new promoter, subject to
continuation of lock-in applicable with the transferee for the remaining period and compliance with
provisions of the Takeover Regulations.
(iv) Further, in terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by persons other
than our Promoters prior to the Offer and locked-in for a period of six months, may be transferred to
any other person holding Equity Shares which are locked in along with the Equity Shares proposed to
be transferred, subject to the continuation of the lock in with the transferee and compliance with the
provisions of the Takeover Regulations.
Our Company, the Selling Shareholders, the Promoters, the Directors and the BRLMs have not entered into
buyback arrangements and / or any other similar arrangements for the purchase of Equity Shares being
offered through the Offer.
All Equity Shares transferred pursuant to the Offer shall be fully paid-up at the time of Allotment and there
are no partly paid-up Equity Shares as on the date of this Prospectus.
As on the date of this Prospectus, the BRLMs and their respective associates (determined as per the definition
of ‘associate company’ under the Companies Act, 2013 and as per definition of the term ‘associate’ under the
Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992) do not hold any Equity
Shares of our Company. The BRLMs and their affiliates may engage in the transactions with and perform
services for our Company in the ordinary course of business or may in the future engage in commercial
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banking and investment banking transactions with our Company for which they may in the future receive
customary compensation.
ESOP Schemes
As on the date of this Prospectus, except as mentioned below, our Company does not have any active
employee stock option plan:
Campus Activewear Private Limited Employee Stock Option Plan 2018 (“2018 ESOP Scheme”)
Our Company adopted the 2018 ESOP Scheme pursuant to resolutions passed by our Board and Shareholders
dated November 2, 2018. The purpose of the 2018 ESOP Scheme is to enable employees of our Company
to get a share in the value that they help create for the organisation over a period of time. As per the terms
of the Shareholders’ resolution dated November 2, 2018, read with the Board resolution dated November 2,
2018, our Board is authorised to issue an aggregate of 3,751,686 (as adjusted for the bonus issue) employee
stock options to employees, exercisable into not more than 3,751,686 fully-paid up Equity Shares, with each
option conferring a right upon employees to apply for one Equity Share, in accordance with the provisions
of the 2018 ESOP Scheme and the terms and conditions as may be fixed or determined by the Board.
3,104,046 options were granted by our Company under the 2018 ESOP Scheme on November 8, 2018.
Further, as on the date of this Prospectus, all the options granted under the 2018 ESOP Scheme have either
been exercised/ lapsed or cancelled and there are no options that are currently outstanding under the 2018
ESOP Scheme. For details of the equity shares allotted pursuant to exercise of options granted under the
2018 ESOP, see “- Notes to the Capital Structure — Equity Share Capital History of our Company” on page
95. The following table sets forth the particulars of the 2018 ESOP Scheme, including options granted as on
the date of this Prospectus:
Particulars From April 1, | Financial Year | Financial Year | Financial Year
2021 to the 2021 2020 2019
date of filing of
this Prospectus
Cumulative options granted as on 291,438 1,159,600 3,104,046 -
beginning of the period
Number of employees to whom = = = 9
options were granted:
Options outstanding NIL 291,438 1,159,600 3,104,046
The pricing formula Black-Scholes Model
Exercise price of options (% per 109.27 109.27 109.27 109.27
option)
Options vested (excluding options that 145,719 145,719 1,944,446 "
have been exercised)
Options exercised 291,438 ~ 1,787,162 ~
Total number of equity shares of face 291,438 S 1,787,162 S
value of 2 10 that would arise as a
result of full exercise of options
granted
Options forfeited / lapsed / cancelled - 868,162 157,284 -
Variation in terms of options The Company in its Board and Shareholders meeting dated September 24,
2021 varied the terms of the last trench of options as a result of which the
vesting period was accelerated for all the existing options granted to all
employees under the 2018 ESOP Scheme.
Money realised by exercise of options 31,845,430 = 195,283,192 =
Total number of options outstanding Nil 291,438 1,159,600 3,104,046
Employee wise details of options
granted to
(a) Key management personnel Options
Name Year of grant Options
granted
Raman Chawla 2018-2019 274,476
(6) Any other employee who
received a grant in any one year Options
of options amounting to 5% or Name Year of grant Options
more of the options granted granted
during the year Piyush Singh 2018-2019 206,628
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Particulars From April 1, | Financial Year | Financial Year | Financial Year
2021 to the 2021 2020 2019
date of filing of
this Prospectus
(©) Identified employees who were ‘Options
granted options, during any one Name Year of grant Options
year equal to or exceeding 1% of granted
the issued capital (excluding | Pramod Sharma 2018-2019 2,308,374
outstanding warrants == and.
conversions) of the Company at
the time of grant
Fully diluted EPS on a pre-Offer basis 2.09 77 4.09 2.56
pursuant to issue of equity shares of
face value of = 10 on exercise of
options calculated in accordance with
the applicable accounting standard
“Earning Per Share’ and consideration
received against the issuance of equity
shares of face value of = 10
Lock-in
Difference between employee
compensation cost calculated using
the intrinsic value of stock options and
the employee compensation cost that
shall have been recognised if the
Company had used fair value of
options and impact of this difference
on profits and EPS of the Company
Description of the pricing formula, method and significant assumptions used during the year to estimate the fair values
of options, including weighted-average
expected dividends and the price of the
information, namely, risk-free interest rate, expected life, expected volatility,
underlying share in market at the time of grant of the option
Pricing formula
Black-Scholes Model
‘Method used Black-Scholes Model
Risk free interest rate 7.98%
Expected life 2.38 years
Expected volatility 29.00%
Expected dividends Nil
Exercise price
168,500 (109.27 as adjusted for Bonus)
Impact on profits and EPS of the last
three years if the Company had
followed the accounting policies
specified in Regulation 15 of the SEBI
ESOP Regulations in respect of
options granted in the last three years
Employee stock options granted under 2018 ESOP Scheme are accounted
for under the Indian Accounting Standard (Ind AS) 102 Share based
payments. The same is in accordance with the SEBI ESOP Regulations.
Since the accounting policies complied with SEBI ESOP Regulations, there
is no impact.
Intention of the key managerial
personnel and whole time directors
who are holders of Equity Shares
allotted on exercise of options granted,
to sell their Equity Shares within three
months after the date of listing of
Equity Shares pursuant to the Offer
Raman Chawla, one of the Key Management Personnel, has expressed his
intention to sell up to 60,000 equity shares of face value of ? 5 each within
three months after the date of listing of Equity Shares pursuant to the Offer.
Intention to sell Equity Shares arising
out of, or allotted under an employee
stock option scheme within three
months after the date of listing of
Equity Shares, by Directors, senior
management personnel and employees
having Equity Shares arising out of an
employee stock
option scheme, amounting to more
than 1% of the issued capital
(excluding outstanding warrants and
conversions) which inter-alia shall
include name, designation and
quantum of the equity shares issued
under an employee stock option
As on the date of this Prospectus, except as disclosed below, none of the (i)
Directors, (ii) Senior Management Personnel and employees holding Equity
Shares amounting more than 1% of the issued capital (excluding outstanding
warrants and conversions) arising out of 2018 ESOP Scheme intend to sell
such Equity Shares within three months after the date of listing of Equity
Shares pursuant to the Offer:
* Piyush Singh, the chief strategy officer of our Company, has been
allotted 413,256 equity shares of face value of ® 5 each, pursuant to the
exercise of options granted to him under the 2018 ESOP Scheme. He
has expressed his intention to sell up to 100,000 equity shares of face
value of % 5 each within three months after the date of listing of Equity
Shares pursuant to the Offer.
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Particulars From April, | Financial Year | Financial Year | Financial Year
2021 to the 2021 2020 2019
date of filing of
this Prospectus
scheme or employee stock purchase
scheme and the quantum they intend to
sell within three months
Campus Activewear Private Limited Employee Stock Option Plan 2021 (“2021 ESOP Scheme”)
Our Company adopted the ESOP Scheme pursuant to resolutions passed by our Board and Shareholders
dated March 19, 2021. The purpose of the 2021 ESOP Scheme is to enable employees of our Company to
get a share in the value that they help create for the organisation over a period of time. As per the terms of
the Shareholders’ resolution dated March 19, 2021, read with the Board resolution dated March 19, 2021,
our Board is authorised to issue an aggregate of 1,520,428 employee stock options to employees, exercisable
into not more than 1,520,428 fully-paid up Equity Shares, with each option conferring a right upon
employees to apply for 1,520,428 Equity Shares, in accordance with the provisions of the 2021 ESOP
Scheme and the terms and conditions as may be fixed or determined by the Board. As on the date of this
Prospectus, 854,028 options have been granted by our Company under the 2021 ESOP Scheme.
The following table sets forth the particulars of 2021 ESOP Scheme, including options granted as on the date
of this Prospectus (as adjusted for the sub-division of equity shares with a face value of 2 10 into two Equity
Shares with a face value of 2 5 each):
Particulars
Details
Options granted
854,028
Exercise price of the options in (@)
June 11, 2021 Grant: 371,426 Option with Exercise Price of % 82.12
June 11, 2021 Grant: 170,342 Option with Exercise Price of = 111.55
June 11, 2021 Grant: 150,896 Option with Exercise Price of = 82.12
September 25, 2021 Grant: 161,364 Option with Exercise Price of =
111.55
Options exercised NIL
Options vested (including options that have NIL
been exercised)
Options forfeited/lapsed/cancelled NIL
Total number of Equity Shares that would arise 854,028
as a result of full exercise of options granted (net
of forfeited/ lapsed/ cancelled options)
Total number of options outstanding in force 854,028
Variation in terms of options
The Company in its Board and Shareholders meeting dated September 24,
2021 varied the terms of the options (option in numbers 150,896) as a
result of which the vesting period in relation to Piyush Singh (Grant date
June 11, 2021) was reduced to one year for all the existing options granted
to him under the Campus Activewear Private Limited- Employee Stock
Option Plan 2021 (“2021 ESOP Scheme”).
Money realized by exercise of options NIL
Employee wise details of options granted to:
() Key Managerial Personnel Name of Key] GrantDate| Number of | Exerci
Managerial options se
Personnel granted | Price
®
Dimple 5 5
Mirchandani* Senge 25, 35,858 111.55
* Dimple Mirchandani was the company secretary of our Company (KMP) as
on the date grant of Options.
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Surender Bansal 182,668
Piyush Singh at 150,896 82.12
Raghu Narayanan | Te L, 125,516 11.55
Uplaksh Tewary A 97,424 82.12
- June 1,
Ambika Wadhwa OL 91,334 82.12
June 11,
Chandresh Sharma 3021 44,826 111.55
NIL
NA
e fair value of the employee stock options have been derived using the
slack-Scholes Model
Significant assumptions are listed below:
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Particulars
Details
Method of | Juneil, | Juneii, | Juneii, | Septem
option 2021 2021 2021 | ber 25,
valuation Grant Grant Grant__| Grant
Fair value of the 157.21 157.21 157.21 160.32
underlying
Equity Share at
the time of grant
of option (@)
Face Value of =
10
Exercise Price | 164.24 223.10 164.24 223.10
per Equity Share
(2), Face Value
of 210
Life of the | 3.5years | 3.5 years 1 years 3.5 years
options granted
(vesting and
exercise period)
(in years).
Expected 40.95% 40.95% 35.60% 40.33%
Volatility (%)
Dividend — yield 0.0% 0.0% 0.0% 0.0%
(%)
Risk free rate 6.24% 6.24% 6.24% 6.18%
(%)
Impact on the profits and on the Earnings Per
Share of the last three years if the accounting
policies specified in the Securities and
Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014 or
Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity)
Regulations, 2021 had been followed, in respect
of options granted in the last three years
Employee stock options granted under 2021 ESOP Scheme are accounted
lfor under the Indian Accounting Standard (Ind AS) 102 Share based
payments. The same is in accordance with the SEBI ESOP Regulations.
|Since the accounting policies complied with SEBI ESOP Regulations, there
lis no impact.
Intention of key managerial personnel and
whole-time directors who are holders of Equity
Shares allotted on exercise of options to sell
their shares within three months after the listing
of Equity Shares pursuant to the Offer
NIL
Intention to sell Equity Shares arising out of the
ESOP Plan or allotted under the ESOP Plan
within three months after the listing of Equity
Shares by directors, senior managerial personnel
and employees having Equity Shares arising out
of the ESOP Plan, amounting to more than 1%
of the issued capital (excluding outstanding
warrants and conversions)
NIL
Campus Activewear Limited Employee Stock Option Plan 2021 - Special Grant (“2021 ESOP Scheme
- SG”)
Our Company adopted the 2021 ESOP Scheme — SG pursuant to resolutions passed by our Board and
Shareholders dated December 14, 2021, and December 18, 2021, respectively. The purpose of the 2021
ESOP Scheme - SG is to enable the employees of our Company to get a share in the value that they have
helped to create for the organization over a period of time. As per the terms of the Shareholders’ resolution
dated December 18, 2021, read with the Board resolution dated December 14, 2021, our Board and / or the
Nomination and Remuneration Committee is authorised to issue an aggregate of 600,000 employee stock
options to employees, exercisable into not more than 600,000 fully-paid up Equity Shares, with each option
conferring a right upon employees to apply for one Equity Share, in accordance with the provisions of the
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the Nomination and Remuneration Committee. As on the date of this Prospectus, 559,421 options have been
granted by our Company under the 2021 ESOP Scheme - SG.
The following table sets forth the particulars of 2021 ESOP Scheme - SG, including options granted as on
the date of this Prospectus:
Particulars
Details
Options granted
559,421
Exercise price of the options in ()
Grant of 559,421 options on December 19, 2021 at an exercise price of
197.16
Options exercised NIL
Options vested (including options that NIL
have been exercised)
Options forfeited/lapsed/cancelled 93,828
Total number of Equity Shares that would 465,593
arise as a result of full exercise of options
granted (net of forfeited/ lapsed/ cancelled
options)
Total number of options outstanding in 465,593
force
Variation in terms of options NIL
Money realized by exercise of options NIL
Employee wise details of options granted
to:
() Key Managerial Personnel Name of Key | Dateof | Numberof | Exercise
Managerial Personnel grant options price (2)
granted
Raman Chawla December is 197.16
19, 2021 202,880*
- December > cana 197.16
Archana Maini 19, 2021 12,680*
* Of which 76,080 options have lapsed
** Of which 2,536 options have lapsed
(i) Any other employee who receives a Date of | Number of | Exercise
grant in any one year of options Name of Employee grant options granted | price (%)
amounting to 5% or more of the
options granted during the year Piyush Singh December 253,601 197.16
19, 2021
(ii) Identified Employees who were NIL
granted options during any one year
equal to or exceeding 1% of the
issued capital (excluding
outstanding —warrants and
conversions) of the Company at the
time of grant
Fully diluted earnings per share on a pre- NA
Offer basis pursuant to the issue of Equity
Shares on exercise of options calculated in
accordance with IND AS 33 ‘Earnings Per
Share”
Difference between employee
compensation cost calculated using the
intrinsic value of stock options and the
employee compensation cost that shall
have been recognised if the Company had
used fair value of options and impact of
this difference on profits and EPS of the
Company
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Campus Activewear Limited - Prospectus | https://www.sebi.gov.in/filings/public-issues/jun-2022/campus-activewear-limited-prospectus_59815.html | https://www.sebi.gov.in/sebi_data/attachdocs/jun-2022/1655719379046.pdf | The following table sets forth the particulars of 2021 ESOP Scheme - VP, including options granted as on
the date of this Prospectus:
Particulars
Details
Options granted
1,039,760
Exercise price of the options in @)
[December 19, 2021 Grant: 1,039,760 Option with Exercise Price of =
197.16
Options exercised NIL
Options vested (including options that have NIL
been exercised)
Options forfeited/lapsed/cancelled 10,144
Total number of Equity Shares that would 1,029,616
arise as a result of full exercise of options
granted (net of forfeited/ lapsed/ cancelled
options)
Total number of options outstanding in force 1,029,616
Variation in terms of options NIL
Money realized by exercise of options NIL
Employee wise details of options granted to:
() Key Managerial Personnel Name of Key | Dateof | Number of | Exercise
Managerial Personnel | grant options | price ()
granted
5] December pag 197.16
Raman Chawla 19, 2021 152,160
. December - 197.16
Archana Maini 19, 2021 40,576
(i) Any other employee who receives a Date of | Numberof | Exercise
grant in any one year of options Name of Employee | grant options price (%)
amounting to 5% or more of the granted
options granted during the year Piyush Singh December | 553 699 197.16
19, 2021
y December en 197.16
Surendar Bansal 19, 2021 126,800
December 197.16
Raghu Narayanan 19, 2021 101,440
December 197.16
Uplaksh Tewary 19, 2021 60,864
(ii) Identified Employees who were NIL
granted options during any one year
equal to or exceeding 1% of the issued
capital (excluding —_ outstanding
warrants and conversions) of the
Company at the time of grant
Fully diluted earnings per share on a pre- NA
Offer basis pursuant to the issue of Equity
Shares on exercise of options calculated in
accordance with IND AS 33 ‘Earnings Per
Share’
Difference between employee compensation
cost calculated using the intrinsic value of
stock options and the _ employee
compensation cost that shall have been
recognised if the Company had used fair
value of options and impact of this
difference on profits and EPS of the
Company
Description of the pricing formula and the
method and significant assumptions used to
[Black-Scholes Model
[The fair value of the employee stock options have been derived using the
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Particulars Details
Description of the pricing formula and the [The fair value of the employee stock options have been derived using the
method and significant assumptions used [Black-Scholes Model
to estimate the fair value of options
granted during the year including, [Significant assumptions are listed below:
weighted average information, namely,
risk-free interest rate, expected life,
Pa acai vet dividends, | Method of option valuation
expected volatility, expected dividends, | Fair value of the underlying Equity Share 206.48
and the price of the underlying share inthe | + the time of grant of option (8) (Face
market at the time of grant of option Value of 25)
(Bshé Face value) Exercise Price per Equity Share (2), (Face 197.16
Value of 25)
Life of the options granted (vesting and 1 years
exercise period) (in years).
Expected Volatility (%) 38.20%
Dividend yield (%) 0.0%
Risk free rate (%) 6.40%
Impact on the profits and on the Earnings [Employee stock options granted under 2021 ESOP Scheme - SG are accounted
Per Share of the last three years if the |for under the Indian Accounting Standard (Ind AS) 102 Share based payments.
accounting policies specified in the [The same is in accordance with the SEBI ESOP Regulations. Since the
Securities and Exchange Board of India laccounting policies complied with SEBI ESOP Regulations, there is no
(Share Based Employee Benefits) limpact.
Regulations, 2014 or Securities and
Exchange Board of India (Share Based
Employee Benefits and Sweat Equity)
Regulations, 2021 had been followed, in
respect of options granted in the last three
years
Intention of key managerial personnel and NIL
whole-time directors who are holders of
Equity Shares allotted on exercise of
options to sell their shares within three
months after the listing of Equity Shares
pursuant to the Offer
Intention to sell Equity Shares arising out NIL
of the ESOP Plan or allotted under the
ESOP Plan within three months after the
listing of Equity Shares by directors,
senior managerial personnel _ and
employees having Equity Shares arising
out of the ESOP Plan, amounting to more
than 1% of the issued capital (excluding
outstanding warrants and conversions)
Campus Activewear Limited Employee Stock Option Plan 2021 - Vision Pool (“2021 ESOP Scheme -
vp”)
Our Company adopted the 2021 ESOP Scheme - VP pursuant to resolutions passed by our Board and
Shareholders dated December 14, 2021, and December 18, 2021, respectively. The purpose of the 2021
ESOP Scheme - VP is to enable the employees of our Company to get a share in the value that they have
helped to create for the organization over a period of time. As per the terms of the Shareholders’ resolution
dated December 18, 2021, read with the Board resolution dated December 14, 2021, our Board and / or the
Nomination and Remuneration Committee is authorised to issue an aggregate of 1,800,000 employee stock
options to employees, exercisable into not more than 1,800,000 fully-paid up Equity Shares, with each option
conferring a right upon employees to apply for one Equity Share, in accordance with the provisions of the
2021 ESOP Scheme - VP and the terms and conditions as may be fixed or determined by the Board and / or
the Nomination and Remuneration Committee. As on the date of this Prospectus, 1,039,760 options have
been granted by our Company under the 2021 ESOP Scheme - VP.
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18.
19.
20.
21.
or insurance companies promoted by entities which are associates of the BRLMs or a FPI (other than
individuals, corporate bodies and family offices) sponsored by entities which are associates of the BRLMs.
Except for the employee stock options allotted or granted pursuant to the ESOP Schemes, there are no
outstanding warrants, options or rights to convert debentures, loans or other convertible instruments into
Equity Shares as on the date of this Prospectus.
There have been no transactions in Equity Shares by our Promoters and members of our Promoter Group
between the date of filing of the Draft Red Herring Prospectus and the date of closing of the Offer that were
required to be reported to the Stock Exchanges within 24 hours of such transactions.
The Promoters and members of our Promoter Group will not receive any proceeds from the Offer, except to
the extent of their participation as Selling Shareholders in the Offer for Sale.
At any given time, there shall be only one denomination of the Equity Shares of our Company, unless
otherwise permitted by law.
Our Company shall comply with such disclosure and accounting norms as may be specified by SEBI from
time to time.
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14.
15.
16.
Particulars Details
estimate the fair value of options granted
during the year including, weighted average |Significant assumptions are listed below:
information, namely, risk-free interest rate,
expected life, expected volatility, expected -yfeqhod of eption valuation
dividends, and the price of the underlying | ¥-ai; value of the underlying Equity Share 206.48
share in the market at the time of grant of | 2+ she time of grant of option (2) (Face
en or Value of % 5)
Facey lus) Exercise Price per Equity Share (@ (Face 197.16
Value of 25)
Life of the options granted (vesting and 3.5 years
exercise period) (in years).
Expected Volatility (%) 44.95%
Dividend yield (%) 0.0%
Risk free rate (%) 6.40%
Impact on the profits and on the Earnings [Employee stock options granted under 2021 ESOP Scheme - VP are
Per Share of the last three years if the jaccounted for under the Indian Accounting Standard (Ind AS) 102 Share
accounting policies specified in the pased payments. The same is in accordance with the SEBI ESOP Regulations.
Securities and Exchange Board of India |Since the accounting policies complied with SEBI ESOP Regulations, there
(Share Based Employee —_ Benefits) [is no impact.
Regulations, 2014 or Securities and
Exchange Board of India (Share Based
Employee Benefits and Sweat Equity)
Regulations, 2021 had been followed, in
respect of options granted in the last three
years
Intention of key managerial personnel and NIL
whole-time directors who are holders of
Equity Shares allotted on exercise of options
to sell their shares within three months after
the listing of Equity Shares pursuant to the
Offer
Intention to sell Equity Shares arising out of NIL
the ESOP Plan or allotted under the ESOP
Plan within three months after the listing of
Equity Shares by directors, senior
managerial personnel and employees having
Equity Shares arising out of the ESOP Plan,
amounting to more than 1% of the issued
capital (excluding outstanding warrants and
conversions)
Except for our Promoters and Chief Financial Officer, none of the Directors or Key Managerial Personnel
of our Company hold any Equity Shares in our Company. For details, see “Our Management — Shareholding
of Directors in our Company” and “Our Management — Shareholding of the Key Managerial Personnel” on
pages 229 and 241 respectively.
No person connected with the Offer, including, but not limited to, our Company, the Selling Shareholders,
the members of the Syndicate, our Promoters, the members of our Promoter Group or our Directors, shall
offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise
to any Bidder for making a Bid, except for fees or commission for services rendered in relation to the Offer.
Except for the Promoter Selling Shareholders who are offering Equity Shares in the Offer for Sale, none of
the members of our Promoter Group will participate in the Offer.
The BRLMs and persons related to the BRLMs or Syndicate Members cannot apply in the Offer under the
Anchor Investor Portion, except for Mutual Funds sponsored by entities which are associates of the BRLMs,
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OBJECTS OF THE OFFER
The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and the
offer for sale of 47,950,000 Equity Shares by the Selling Shareholders in the Offer, aggregating to = 13,996.00
million, subject to finalisation of the Basis of Allotment. For details of the Offer, see “The Offer” on page 76. For
details of Offered Shares from each Selling Shareholder, see “Other Regulatory and Statutory Disclosures” on
page 371.
Further, the listing of Equity Shares will enhance our Company’s brand name and provide liquidity to the existing
Shareholders. Our Company expects that the proposed listing will also provide a public market for the Equity
Shares in India. The Selling Shareholders will be entitled to the entire proceeds of the Offer after deducting the
Offer expenses and relevant taxes thereon. Our Company will not receive any proceeds from the Offer.
Offer expenses
The Offer expenses are estimated to be approximately % 863.76 million. The Offer expenses comprises of, among
other things, listing fee, underwriting fee, selling commission and brokerage, fee payable to the Book Running
Lead Managers, legal counsel, Registrar to the Offer, Escrow Collection Bank, processing fee to the SCSBs for
processing ASBA Forms submitted by ASBA Bidders procured by the Syndicate and submitted to SCSBs,
brokerage and selling commission payable to Registered Brokers, RTAs and CDPs, fees payable to the Sponsor
Banks for Bids made by RIBs using UPI mechanism, printing and stationery expenses, advertising and marketing
expenses and all other incidental expenses for listing the Equity Shares on the Stock Exchanges.
Other than (a) listing fees, any costs incurred in issuing corporate advertisements (i.e. any corporate
advertisements consistent with past practises of the Company and not including any fee paid to any marketing or
advertising agency, for marketing and advertisements, appointed by the Company in connection with the Offer),
and auditor fees for annual audit each of which shall be borne by the Company, and (b) fees and expenses in
relation to the legal counsel to the Selling Shareholders which shall be borne by the respective Selling
Shareholders severally and not jointly, all costs, charges, fees and expenses associated with and incurred in
connection with the Offer, issue advertising, printing, road show expenses, accommodation and travel expenses,
stamp, transfer, issuance, documentary, registration, costs for execution and enforcement of the Offer Agreement,
Registrar’s fees, fees to be paid to the BRLMs, fees and expenses of legal counsel to the Company and the BRLMs,
fees and expenses of the auditors, fees to be paid to Sponsor Banks, SCSBs (processing fees and selling
commission), brokerage for Syndicate Members, commission to Registered Brokers, Collecting DPs and
Collecting RTAs, and payments to consultants, and advisors, shall be shared among each of the Selling
Shareholders severally and not jointly, in proportion to the number of Equity Shares sold by each of the Selling
Shareholders through the Offer for Sale. Further, in the event the Offer is postponed or withdrawn or abandoned
for any reason by way of mutual agreement between the Company and the Selling Shareholders or the Offer is
not successful, all costs and expenses with respect to the Offer shall be shared between the Selling Shareholders
and the Company, in accordance with the Offer Agreement.
The break-up for the estimated Offer expenses are as follows:
a Estimated Asa% of total | Asa%
x Activity amount estimated Offer | of Offer
(Zin million) Expenses Size
1._| Book Running Lead Managers’ fees 396.37 45.89 2.83
Commission/processing fee for SCSBs, Sponsor Bank and
| Bankers to the Offer. Brokerage and selling commission and sae ava O77
bidding charges for Members of the Syndicate, Registered
Brokers, RTAs and CDPs,X2@Q9000,
3._| Fees payable to Registrar to the Offer 18.88 2.19 0.13
Fees payable to the other advisors to the Offer (including fees
4, 147.49 17.08 1.05
for legal counsels)
5. | Others
¢ — SEBI filing fees, upload fees, BSE and NSE processing
fees, book building software fees and other regulatory 53.22 6.16 0.38
expenses
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Z Estimated Asa% oftotal | Asa%
xD Activity amount estimated Offer | of Offer
(Zin million) Expenses Size
© Advertising, Marketing, Printing and Stationery 110.92 ed 0.79
Expenses
* Miscellaneous 29.50 3.42 0.21
Total Estimated Offer Expenses 863.76 100.00 6.17
Note: The above expenses are inclusive of Goods & Services Tax and other taxes (wherever applicable).
(1) Selling commission payable to the SCSBs on the portion for RIBs, Non-Institutional Bidders and Eligible Employees which are directly
procured and uploaded by the SCSBs, would be as follows:
Portion for RIBS*
Portion for Eligible Employees
Portion for Non-Institutional Bidders*
[2.35% of the Amount Allotted* (plus applicable taxes)
(0.25% of the Amount Allotted* (plus applicable taxes)
[0.20% of the Amount Allotted* (plus applicable taxes)
(2)
@)
(4)
(5)
©
”)
* Amount Alloited is the product of the number of Equity Shares Allotted and the Offer Price.
No additional uploading/processing fees shall be payable to the SCSBs on the applications directly procured by them. The Selling
commission payable to the SCSBs will be determined on the basis of the bidding terminal ID as captured in the bid book of BSE or NSE.
Processing fees of @ 10 per valid application (plus applicable taxes) will be payable to the SCSBs for processing the Bid cum Application
of Retail Individual Bidders, Non-Institutional Bidders and Eligible Employees procured from the Syndicate / sub-Syndicate Members /
Registered Brokers / RTAs / CDPs and submitted to SCSBs for blocking. SCSBs will be entitled to a processing fee of @ 10 (plus
applicable taxes), per valid ASBA Form.
Brokerages, selling commission and processing/uploading charges on the portion for Retail Individual Bidders (using the UPI
mechanism), Non-Institutional Bidders and Eligible Employees which are procured by members of Syndicate (including their sub-
Syndicate Members), RTAs and CDPs or for using 3-in-1 type accounts-linked online trading, demat & bank account provided by some of
the brokers which are members of Syndicate (including their sub-Syndicate Members) would be as follows:
Portion for RIBS [0.35% of the Amount Allotted™ (plus applicable taxes)
Portion for Eligible Employees (0.25% of the Amount Allotted (plus applicable taxes)
Portion for Non-Institutional Bidders [0.20% of the Amount Allotted* (plus applicable taxes)
* Amount Allotted is the product of the number of Equity Shares Allotted and the Offer Price.
The Selling Commission payable to the Syndicate / sub-Syndicate Members will be determined on the basis of the application form
number / series, provided that the application is also bid by the respective Syndicate / sub-Syndicate Member. For clarification, if a
Syndicate ASBA application on the application form number / series of a Syndicate / Sub-Syndicate Member, is bid by an SCSB, the
Selling Commission will be payable to the SCSB and not the Syndicate / Sub-Syndicate Member.
The payment of Selling Commission payable to the sub-brokers / agents of Sub-Syndicate Members are to be handled directly by the
respective Sub-Syndicate Member.
The Selling Commission payable to the RTAs and CDPs will be determined on the basis of the bidding terminal id as captured in the
bid book of BSE or NSE.
Uploading charges / processing charges of % 30 per valid application (plus applicable taxes) are applicable only in case of Bids
uploaded by the members of the Syndicate, RTAs and CDPs for applications made by Retail Individual Bidders using the UPI
Mechanism.
Uploading charges / processing charges of @ 10 per valid application (plus applicable taxes) are applicable only in case of Bids
uploaded by the members of the Syndicate, RTAs and CDPs for applications made by Retail Individual Bidders using 3-in-I type
accounts and for Non-Institutional Bidders using Syndicate ASBA mechanism / using 3- in -1 type accounts.
The Bidding/uploading charges payable to the Syndicate / Sub-Syndicate Members, RTAs and CDPs will be determined on the basis of
the bidding terminal id as captured in the bid book of BSE or NSE.
Selling commission payable to the Registered Brokers on the portion for Retail Individual Bidders & Non-Institutional Bidders which
are directly procured by the Registered Brokers and submitted to SCSB for processing would be as follows:
Portion for Retail Individual & Non-Institutional Bidders
“Based on valid applications.
[107 per valid application* (plus applicable taxes)
Processing fees for applications made by Retail Individual Bidders using the UPI mechanism will be:
Sponsor Bank )°6for ICICI Bank Limited per valid Bid cum Application Form* (plus applicable taxes).
\°8 for each of Axis Bank Limited, HDFC Bank Limited and Kotak Mahindra Bank Limited
er valid Bid cum Application Form* (plus applicable taxes).
“For each valid application.
The Sponsor Bank(s) shall be responsible for making payments to the third parties such as remitter bank, NPCI and such other parties as
required in connection with the performance of its duties under the SEBI circulars, the Syndicate Agreement and other applicable laws.
The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism may be released to the remitter banks
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SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021 read with SEBI Circular No: SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M
dated March 16, 2021.
The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism may be released
to the remitter banks (SCSBs) only after such banks provide a written confirmation on compliance with SEBI
Circular No: SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021 read with SEBI Circular No:
SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021.
Monitoring utilization of funds from the Offer
Since the Offer is an offer for sale and our Company will not receive any proceeds from the Offer, our Company
is not required to appoint a monitoring agency for the Offer.
Other confirmations
Except to the extent of any proceeds received pursuant to the sale of the Offered Shares by the Promoter Selling
Shareholders, there is no proposal whereby any portion of the Offer Proceeds will be paid to our Promoters,
Promoter Group, Directors or Key Managerial Personnel, except in the ordinary course of business.
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The Offer Price will be determined by our Company and TPG Growth III SF Pte. Ltd., in consultation with the
Book Running Lead Managers, on the basis of assessment of market demand for the Equity Shares offered through
the Book Building Process and on the basis of the qualitative and quantitative factors as described below. The
face value of the Equity Shares is = 5 and the Offer Price is 58.40 times the face value of the Equity Shares. The
financial information included herein is derived from our Restated Consolidated Financial Information.
Prospective investors should also refer to “Our Business”, “Risk Factors”, “Financial Statements”,
“Management's Discussion and Analysis of Financial Position and Results of Operations” and “Other Financial
Information” on pages 169, 32, 249, 323 and 318 respectively, to have an informed view before making an
investment decision.
Qualitative factors
Some of the qualitative factors and our strengths which form the basis for computing the Offer Price are:
e India’s largest sports and athleisure footwear brand and fastest growing scaled sports and athleisure footwear
brand with a robust product portfolio across the demand spectrum (Source: Technopak Report);
« Sustained focus on design and product innovation facilitating access to the latest global trends and styles
through our fashion forward approach;
¢ Difficult to replicate integrated manufacturing capabilities supported by robust supply chain;
© — Strong brand recognition, innovative branding and marketing approach; and
e Our experienced management team
For further details, see “Our Business — Our Strengths” on page 178.
Quantitative factors
Some of the information presented below relating to our Company is based on the Restated Consolidated Financial
Information. For details, see “Financial Statements” on page 249.
Some of the quantitative factors which may form the basis for calculating the Offer Price are as follows:
I. Basic and diluted earnings per share (“EPS”)
Fiscal Year ended Basic EPS (in | Diluted EPS (in 3 Weight
March 31, 2021 0.88 0.88 3.00
March 31, 2020 2.05 2.05 2.00
March 31, 2019 1.28 1.28 1.00
Weighted Average 1.34 1.34 =
Nine months ended December 31, 2021* 2.82 2.82
* Not annualised.
(Basic EPS (2) = Profit for the year/period attributable to equity shareholders of the Company divided by total weighted average number
of equity shares outstanding at the end of the year/period.
© Diluted EPS (2) = Profit for the year/period attributable to equity shareholders of the Company divided by total weighted average number
of equity shares outstanding at the end of the year/period.
Notes:
1. Basic and diluted earnings per share are computed in accordance with Indian Accounting Standard 33 ‘Earnings per Share’, notified
accounting standard by the Companies (Indian Accounting Standards) Rules of 2015 (as amended).
2. Weighted average number of shares is the number of Equity Shares outstanding at the beginning of the period adjusted by the number
of shares issued during the period multiplied by the time weighting factor. The time weighting factor is the number of days for which the
specific shares are outstanding as a proportion of total number of days during the period.
3. The above statement should be read with significant accounting policies and notes on Restated Consolidated Financial Information as
appearing in the Restated Consolidated Financial Information.
4, The Board of Directors and Shareholders of our Company at their meeting held on November 9, 2021, have approved stock split of one
equity share having face value of 2 10 each into two equity shares having face value of ® 5 each. These changes have been considered
retrospectively for the purpose of calculation of the basic and diluted earnings per equity share.
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Particulars P/E at the Offer Price
(number of times)
Based on basic EPS for Fiscal 2021 331.82
Based on diluted EPS for Fiscal 2021 331.82
Based on basic EPS for nine months period ended December 31, 2021 103.55
Based on diluted EPS for nine months period ended December 31, 2021 103.55
Industry Peer Group P/E ratio
Particulars Industry P/E (number of times)
Highest 98.49
Lowest NA.
‘Average 98.49
Notes:
(1) The industry high and low has been considered from the industry peer set provided in “- Comparison with listed industry peers" on page
118.
(2) The industry composite has been calculated as the arithmetic average of P/E for industry peer set disclosed in this section. For further
details, see “- Comparison with listed industry peers” on page 118.
III. Average Return on Net Worth (“RoNW”)
Derived from Restated Consolidated Financial Information:
Fiscal Year ended RoNW (%)® Weight
March 31, 2021 8.60 3.00
March 31, 2020 21.63 2.00
March 31, 2019 19.04 1.00
Weighted Average 14.68 <
Nine months ended December 31, 2021* 21.26"
* Not annualised.
(Return on Net Worth (%) = Restated profit for the period / year as divided by Equity attributable to the owners of the Company, as at
the end of the period / year.
Net Worth means equity attributable to owners of the Company as per the Restated Consolidated Financial Information.
IV. Net Asset Value per Equity Share
Fiscal year ended/ Period ended NAV per Equity Share ©
As on March 31, 2021 10.29
As on December 31, 2021* 13.25
Offer Price 13.25,
* Not annualised.
Net Asset Value per Equity Share: Equity attributable to owners of the Company divided by weighted average numbers of equity shares
outstanding during the year.
Note: The Board of Directors and Shareholders of our Company at their meeting held on November 9, 2021, have approved stock split of one
equity share having face value of @ 10 each into two equity shares having face value of @ 5 each. These changes have been considered
retrospectively for the purpose of calculation of the Net Asset Value per Equity Share.
Vv. Comparison with listed industry peers
7 Total
Name of the | Consolidated/ | value | Closing price on oes EPS (@) Ney PE RoNW
company | Standalone | (&per | April/6, 2022(®) | 9991 Gn Es) Ratio (%)
hare) ea
ner) million) [Basic _| Diluted
Campus
Activewear Consolidated 5.00 NA 7,150.80 0.88 0.88 10.29 - 8.60
Limited*
PEER GROUP
Bata India Consolidated 5.00 2,016.90 18,025.65 (6.95) (6.95) 136.79 NAA (5.08),
Limited
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Total
Face
Name of the | Consolidated/ | value | Closing price on fonda EPS () NAV@ | pe | Row
company | Standalone | @ per | April, 2022@®) | Jot nace abey | Ratio | (6)
aa million) Basic_| Diluted
Relaxo Standalone 1.00 1,154.25 23,819.20 11.74 11.72 63.29 98.49 18.54
Footwears
Limited
‘Source: All the financial information for listed industry peers mentioned above is sourced from the annual audited financial results of the
company for the year ended March 31, 2021.
* Financial information for Campus Activewear Limited is derived from the Restated Financial Statements for Fiscal 2021.
‘Not applicable since EPS is negative.
Notes for listed peers:
1. Basic EPS and Diluted EPS refer to the Basic EPS and Diluted EPS sourced from the financial statements of the respective company.
2. P/E Ratio has been computed based on the closing market price of equity shares on BSE on April 6, 2022 divided by the Diluted EPS
provided.
3. RONW is computed as net profit after tax (including profit attributable to non-controlling interest) divided by closing net worth. Net worth
has been computed as sum of paid-up share capital and other equity.
The Offer Price of = 292 has been determined by our Company and TPG Growth III SF Pte. Ltd. in consultation with
the Book Running Lead Manager, on the basis of market demand from investors for Equity Shares, as determined
through the Book Building Process, and is justified in view of the above qualitative and quantitative parameters.
Prospective investors should read the above mentioned information along with “Risk Factors”, “Our Business”,
“Management's Discussion and Analysis of Financial Position and Results of Operations” and “Financial
Statements” on pages 32, 169, 323 and 249 respectively, to have a more informed view. The trading price of the
Equity Shares could decline due to the factors mentioned in the “Risk Factors” and you may lose all or part of your
investments.
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The Board of Directors
Campus Activewear Limited (formerly known as “Campus Activewear Private Limited ”)
D-1, Udyog Nagar
New Delhi - 110041
April 18, 2022
Subject: Statement of possible special tax benefits (“the Statement”) available to Campus Activewear
Limited (formerly known as “Campus Activewear Private Limited ”) (“the Company”), its
shareholders and its material subsidiary prepared in accordance with the requirement under
Schedule VI - Part A - Clause (9) (L) of Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2018 (“the ICDR Regulations”)
This report is issued in accordance with the Engagement Letter dated 5 October 2021.
We hereby report that the enclosed Annexure II prepared by the Company, initialed by us for identification
purpose, states the possible special-tax benefits available to the Company, its shareholders and its material
subsidiary, which is defined in Annexure I (List of Material Subsidiary Considered As Part Of The
Statement), under direct and indirect taxes (together “the Tax Laws”), presently in force in India as on the
signing date, which are defined in Annexure I. These possible special tax benefits are dependent on the Company,
its shareholders and its Material Subsidiary fulfilling the conditions prescribed under the relevant provisions of
the Tax Laws. Hence, the ability of the Company, its shareholders and its Material Subsidiary to derive these
possible special tax benefits is dependent upon their fulfilling such conditions, which is based on business
imperatives the Company and its Material Subsidiary may face in the future and accordingly, the Company, its
shareholders and its Material Subsidiary may or may not choose to fulfill.
The benefits discussed in the enclosed Annexure II cover the possible special tax benefits available to the
Company, its shareholders and its Material Subsidiary and do not cover any general tax benefits available to the
Company, its shareholders and its Material Subsidiary. Further, the preparation of the enclosed Annexure II and
its contents is the responsibility of the Management of the Company. We were informed that the Statement is only
intended to provide general information to the investors and is neither designed nor intended to be a substitute for
professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each
investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out
of their participation in the proposed initial public offering of equity shares of the Company (the “Proposed
Offer”) particularly in view of the fact that certain recently enacted legislation may not have a direct legal
precedent or may have a different interpretation on the possible special tax benefits, which an investor can avail.
Neither we are suggesting nor advising the investors to invest money based on the Statement.
We conducted our examination in accordance with the “Guidance Note on Reports or Certificates for Special
Purposes (Revised 2016)” (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. The
Guidance Note requires that we comply with ethical requirements of the Code of Ethics issued by the Institute of
Charted Accountants of India.
We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that Perform Audits and Reviews of Historical Financial information, and Other Assurance and
Related Services Engagements.
We do not express any opinion or provide any assurance as to whether:
i) the Company, its shareholders and its Material Subsidiary will continue to obtain these possible
special tax benefits in future; or
ii) the conditions prescribed for availing the possible special tax benefits where applicable, have
been/would be met with.
The contents of the enclosed Annexures are based on the information, explanation and representations obtained
from the Company and its Material Subsidiary, and on the basis of our understanding of the business activities
and operations of the Company and its Material Subsidiary.
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revenue authorities/ courts will concur with the views expressed herein. Our views are based on the existing
provisions of the Tax Laws and its interpretation, which are subject to change from time to time. We do not assume
responsibility to update the views consequent to such changes. We shall not be liable to the Company for any
claims, liabilities or expenses relating to this assignment except to the extent of fees relating to this assignment,
as finally judicially determined to have resulted primarily from bad faith or intentional misconduct. We will not
be liable to the Company and any other person in respect of this Statement, except as per applicable law.
We hereby give consent to include this Statement in the Red Herring Prospectus, the Prospectus and submission
of this statement to the Securities and Exchange Board of India, the stock exchanges where the Equity Share of
the Company are proposed to be listed, the relevant Registrar of Companies in India and in any other material
used in connection with the Proposed Offer, and it is not to be used, referred to or distributed for any other purpose
without our prior written consent.
For BS R & Associates LLP
Chartered Accountants
ICAI Firm’s Registration No.: 116231W/W-100024
Ashwin Bakshi
Membership No.: 506777
UDIN: 22506777AHGDXQ3134
Place: New Delhi
Date: April 18, 2022
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LIST OF DIRECT AND INDIRECT TAX LAWS (‘TAX LAWS’)
Sr. No: Details of tax laws
Income-tax Act, 1961 and Income-tax Rules, 1962
Central Goods and Services Tax Act, 2017
Integrated Goods and Services Tax Act, 2017
AL ePNp re
State Goods and Services Tax Act, 2017
LIST OF MATERIAL SUBSIDIARIES CONSIDERED AS PART OF THE STATEMENT (Note
1)
1. Campus AI Private Limited (‘Material Subsidiary’)
Note 1: Material subsidiaries identified in accordance with the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, include a subsidiary whose income or net worth
in the immediately preceding year (i.e. 31 March 2021) exceeds 10% of the consolidated income or consolidated
net worth respectively, of the holding company and its subsidiaries in the immediate preceding year.
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STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO CAMPUS ACTIVEWEAR
LIMITED (formerly known as “CAMPUS ACTIVEWEAR PRIVATE LIMITED ”) (“THE
COMPANY”) AND ITS SHAREHOLDERS AND ITS MATERIAL SUBSIDIARY UNDER THE
APPLICABLE DIRECT AND INDIRECT TAXES (“TAX LAWS”)
Outlined below are the Possible Special Tax Benefits available to the Company, its shareholders and its Material
Subsidiary under the Tax Laws. These Possible Special Tax Benefits are dependent on the Company, its
shareholders and its Material Subsidiary fulfilling the conditions prescribed under the Tax Laws. Hence, the ability
of the Company and its shareholders and its Material Subsidiary to derive the Possible Special Tax Benefits is
dependent upon fulfilling such conditions, which are based on business imperatives it faces in the future, it may
or may not choose to fulfill.
UNDER THE TAX LAWS
A. Special tax benefits available to the Company
1. Lower corporate tax rate under section 115BAA of the Income-tax Act, 1961 (‘the Act’)
Section 115BAA has been inserted in the Act w.e.f. 1 April 2020 (A.Y. 2020-21). Section 115BAA of
the Act grants an option to a domestic Company to be governed by the section from a particular
assessment year. If a Company opts for section 115BAA of the Act, it can pay corporate tax at a reduced
rate of 25.168% (22% plus surcharge of 10% and education cess of 4%). Section 115BAA of the Act
further provides that domestic Companies availing the said option will not be required to pay Minimum
Alternate Tax (“MAT”) on their “book profits’ under section 115JB of the Act.
However, such a company will no longer be eligible to avail specified exemptions / incentives under the
Act and will also need to comply with the other conditions specified in section 115BAA of the Act. Also,
if a Company opts for section 115BAA of the Act, the tax credit (under section 115JAA of the Act), if
any, which it is entitled to on account of MAT paid in earlier years, will no longer be available. Further,
it shall not be allowed to claim set-off of any brought forward loss arising to it on account of additional
depreciation and other specified incentives.
The Company has not opted to apply section 115BAA of the Act for Financial Year 2021-22. Once the
Company decides to opt for applicability of concessional tax rate, it would not be eligible to claim below
deduction and MAT credit.
2. Deductions from Gross Total Income
Section 80G of the Act: Deductions in respect of donations
Subject to conditions prescribed in the Act, the Company is entitled to claim deduction, under the
provisions of Section 80G of the Act, of an amount equal to hundred per cent or fifty percent (as
applicable as per the provisions of the Act) of the amount of donations made by the Company in the
relevant previous year.
However, where the Company opts for special rate of tax under section 115BAA of the Act, such
deduction shall not be allowed in computation of total income in the relevant previous year.
B. Special tax benefits available to Shareholders
As per section 112A of the Act, long-term capital gains arising from transfer of an equity share, or a unit
of an equity oriented fund or a unit of a business trust shall be taxed at 10% (without indexation) of such
capital gains subject to fulfillment of prescribed conditions under the Act as well as per Notification No.
60/2018/F. No.370142/9/2017-TPL dated 1 October 2018. It is worthwhile to note that tax shall be levied
where such capital gains exceed INR 100,000.
As per section 111A of the Act, short term capital gains arising from transfer of an equity share, or a unit
of an equity oriented fund or a unit of a business trust shall be taxed at 15% subject to fulfillment of
prescribed conditions under the Act.
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to any benefits available under the applicable Double Taxation Avoidance Agreement, if any, between
India and the country in which the non-resident has fiscal domicile.
Except for the above, the Shareholders of the Company are not entitled to any other special tax benefits
under the Act.
C. Special tax benefits available to Material Subsidiary
There are no special tax benefits available to the Material Subsidiary under the Tax Laws.
NOTES:
1. The above is as per the current Tax Laws.
2. The above Statement of possible special tax benefits sets out the provisions of Tax Laws in a summary
manner only and is not a complete analysis or listing of all the existing and potential tax consequences
of the purchase, ownership and disposal of equity shares of the Company.
3. This Statement does not discuss any tax consequences in any country outside India of an investment in
the equity shares of the Company. The shareholders / investors in any country outside India are advised
to consult their own professional advisors regarding possible income tax consequences that apply to them
under the laws of such jurisdiction.
For CAMPUS ACTIVEWEAR LIMITED (formerly known as Campus Activewear Private Limited)
Director
Place: New Delhi
Date: April 18, 2022
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Several structural factors are likely to contribute to economic growth in the long run. These include favorable
demographics, reducing dependency ratio, rapidly rising education levels, steady urbanization, growing young
and working population, information technology revolution, increasing penetration of mobile and internet
infrastructure, increasing aspirations and affordability etc.
Exhibit 2: India's Nominal GDP in FY (US$ billion)
India's Rank in World GDP
Growth Projections 3.0% 13.5% 10.7%
77
1991 1995, 2000 2005 2010 2015 2018 2019 2020 2021 2022P = 2025P
mw Nominal GDP
1 US$=2 75
DOMESTIC CONSUMPTION
High share of domestic consumption in Private Final Consumption Expenditure (PFCE)
India's share of domestic consumption, measured as private final consumption expenditure, in its GDP was
approximately 60.5% in FY 2020. This private consumption expenditure includes final consumption expenditures
of households and non-profit institutions serving households, and comprises both goods (food, lifestyle, home,
pharmacy etc.) and services (food services, education, healthcare etc.). In comparison China's domestic
consumption share to GDP in 2020 was 39.24%. High share of private consumption to GDP has the advantage of
insulating India from volatility in the global economy. It also implies that sustainable economic growth directly
translates into sustained consumer demand for goods and services. India's domestic consumption has grown at a
CAGR of 11.1% between FY 2014 and FY 2019, compared to 4.3% and 8.2% in the United States and China,
respectively.
Exhibit 3: India's Private Final Consumption Expenditure (In US$ billion)
CAGR: 12.8% (1991-2020) 6%
10%
1991 2005 2010 2015 2016 2017 2018 2019 2020 2021 2025P.
m PFCE
Source: Technopak Analysis, RBI Data; Year indicates FY
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INDUSTRY OVERVIEW
The information contained in this section is derived from a report titled “Report on Footwear Retail in India”
dated April 7, 2022 prepared by Technopak, and exclusively commissioned and paid by our Company only for the
purposes of the Offer. Industry sources and publications generally state that the information contained therein
has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying
assumptions are not guaranteed and their reliability cannot be assured. Industry publications are also prepared
based on information as at specific dates and may no longer be current or reflect current trends. Accordingly,
investment decisions should not be based on such information. Forecasts, estimates, predictions, and other
forward-looking statements contained in the Technopak Report are inherently uncertain because of changes in
factors underlying their assumptions, or events or combinations of events that cannot be reasonably foreseen.
Actual results and future events could differ materially from such forecasts, estimates, predictions, or such
statements. In making any decision regarding the transaction, the recipient should conduct its own investigation
and analysis of all facts and information contained in the prospectus and the recipient must rely on its own
examination and the terms of the transaction, as and when discussed. See “Certain Conventions, Use of Financial
Information, Industry and Market Data and Currency of Presentation — Industry and Market Data” on page 18.
In this section, please note that numbers or multiples denoting (a) a ‘lakh’ is equal to 1,00,000 and 10 lakhs is
equal to I million or one million; and (b) a ‘crore’ is equal to 10,000,000 and 100 lakhs or one crore is equal
to 10 million.
In this section, unless the context requires, references to “we”, “us”, “our” and similar terms are to Campus
Activewear Limited, on a consolidated basis.
SECTION I: OVERVIEW OF THE INDIAN ECONOMY
INDIA GDP AND GDP GROWTH
Currently, India ranks sixth in the world in terms of nominal gross domestic product (“GDP") and is the third
largest economy in the world in terms of purchasing power parity (“PPP”). India is estimated to be among the top
three global economies in terms of nominal GDP by FY 2050. India is the fastest growing G20 economy since
FY 2015.
The country wise GDP of key countries is given in the table below:
Exhibit 1: Country Wise GDP (USS trillion)
Country | CY | CY | GY | CY | CY |] GY ] GY | cy ] cy | cy | Cy | CY | CAGR
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2025P | (2020-
2025)
USA 15 | 155 | 162 | 168 | 175 | 182 | 187 | 196 | 206 | 214 | 209 | 267 | 5.0%
China 61 | 76 | 85 | 96 | 105 | 1] iu2/)i23 | 139 | 143 | 147 | 225 | 89%
Japan s7 | 62 | 63 | 52 | 49 | 44 | 50 | 49 | 50 | 51 | 50 | 63 | 47%
Germany | 34 | 37 | 35 | 37 | 39 | 34 | 35 | 37 | 40 | 39 | 38 | 51 | 61%
UK 25 | 27 | 27 | 28 | 31 | 29 | 27 | 26 | 29 | 28 | 27 | 38 | 7.1%
Tndia* o9 | 10 | 12 | 14 | 17 [17 [19 [23 [24 | 27 | 26 | 42 | 101%
France 26 | 29 | 27 | 28 | 29 | 24 | 25 | 26 | 28 | 27 | 26 | 34 | 55%
Traly 21 | 23 | 21 | 21 | 22 | 18 | 19 | 20 | 21 | 20 | 19 | 24 | 48%
Canada ii [18 [is [is [is | ie | is | 16 | 17 | 17 | 16 | 23 | 75%
Korean 11} 13 | 13 | 14] 15 J 15 | 1s | 16 | 17 | 16 | 16 | 21 | 5.6%
Republic
Source: India Data from RBI, up to 2019 data from World Bank, Future growth rate from OECD Data, Technopak Analysis
IUSS = & 75 (for 2019 India numbers)
* For India, CY 2019 means FY 2020
INDIA’S GDP GROWTH
Since FY2005, Indian economy’s growth rate has been twice as that of the world economy and it is expected to
sustain this growth momentum in the long term. In the wake of COVID-19, India's nominal GDP contracted in
125
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FY 2020. While consumption will suffer a setback in the short term, it is expected to reach to approximately US$
2.27 trillion by FY 2025.
PER CAPITA INCOME GROWTH
Exhibit 4: India's GDP Per Capita (%) (Current Prices)
2,42,819
2,00,184
1,81,582
39,633 148,808
7 1,39,633 1,42,073
1,05,117
2015 2016 2017 2018 2039 2020 2021P 2022P 2023P 2024P 2025P
Year indicates CY
Source: IMF projections
Note: Numbers for 2021-2025 are Provisional
The per capita income of India has been showing an increasing trend since 2012; growing at a healthy CAGR of
approximately 10%, the per capita income reached %1,48,808 in CY 2019. Given the impact of COVID-19, it
decreased to 21,42,073 in CY 2020. However, it is expected to bounce back to 21,64,137 in CY 2021 and continue
its growth journey at a CAGR of 10.3% between CY 2021 and CY 2025.
GROWTH DRIVERS
India’s medium to long term growth and its positive impact on private consumption will be determined by inter-
play of demographics, urbanization, and policy reforms.
DEMOGRAPHIC PROFILE OF INDIA
Young population
India has one of the youngest populations globally compared to other leading economies. The total population of
India is 1,394 million for FY 2021. The median age in India is estimated to be 28.1 years in 2021 as compared to
38.1 years and 37.4 years in the United States and China, respectively, and is expected to remain under 30 years
until 2030.
Exhibit 5: Median Age: Key Emerging and Developed Economies (CY 2021 Estimated)
Country India China USA Singapore | Russia Korea Canada | UK
Median age 28.1 37.4 38.1 34.6 39.6 41.8 42.2 40.5
(years)
Source: World Population Review, Technopak Analysis
The size of India's young population is contributing to a decline in the dependency ratio (the ratio of dependent
population size compared to the working-age population size (15 to 64 years of age), which has decreased from
64% in FY 2000 to 50% in FY 2018. This trend is expected to lead to rising income levels per household as well
as higher levels of discretionary expenditure. A substantial rise in India’s working age population from 36% in
FY 2000 to 50% in FY 2019 is expected to continue sustaining the growth momentum of the Indian economy and
lead to rising income levels in the long-term. The younger segment of the population is naturally pre-disposed to
adopting new trends given their exposure to media and technology, which presents an opportunity for branded
products and organized retail.
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Exhibit 6: Age Dependency Ratio
Dependency Ratio
Age-wise Break-up of Age-wise Break-up of (6 oF working-age populatich)
Male Population 2011 Female Population 2011
ioe 77% 79%
8570 RM A089 52% 51% 50% 50% 49%
45-54 ace BM SMR: SK as
35-44
25-34
15-24 $$ 9
16% 0-14 14% 1960 1970 1980 1990 2000 2010 2016 2017 2018 2019 2020
Growth in Population (15-34 yrs.)
34.8%
34.1%
33.5% 33.8%
32.2%
1981 1991 2001 2011 2021P
Source: Census of India 2011, World Bank, MOSPI
Years mentioned are FY
‘Age wise break up of population is not adding up to 100% due to rounding off
Women Workforce
Numerous factors, including better health care and greater media focus are allowing women in India, in both urban
and rural areas, to exercise greater influence on their families and society as a whole. The most important factor,
however, is educational opportunity. Between 2005 and 2015, enrolment of girls in secondary education increased
from 45.3% to 81% and in FY 2019 was higher than enrolment of boys. Higher education has also seen an increase
in women enrolment, with almost 20% of women pursuing higher education studies compared to 22% of men.
These changes are expected to have a broad impact on societal factors, including workforce demographics and
economic independence for women. The share of women workforce in the services sector has increased from
17.5% in CY 2010 to 28% in CY 2019. The overall share of working women increased from approximately 14%
in 2000 to approximately 17.5% in 2010 and further to approximately 27% in 2018.
Urbanization
India has the second largest urban population in the world in absolute terms at 472 million in FY 2019, second
only to China. However, only 34.5% of India's population is classified as urban compared to a global average of
approximately 56%. It is the pace of India's urbanization that is a key trend to note for implication on India's
economic growth. Currently urban population contributes 63% of India's GDP. Going forward, it is estimated that
37% (541 million) of India's population will be living in urban centers by FY 2025. Urban population is expected
to contribute 55% of India’s GDP by FY 2025 and 70% by FY 2030. This is expected to continue with ~50% of
India's population expected to be living in urban centers by 2050 and contributing ~80% of India's GDP.
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Exhibit 7: Increasing Urbanization (Years in CY)
Urban Population (% of total)
50.0%
37.0%
9, 32.8% 33.6% 34.0% 34.5% 35.0%
27.7% 30.9%
CY2000 CY2010 CY2015 CY2017 CY2018 CY2019 CY2020 CY2025PCY2050P
Source: World Bank, Technopak Analysis
Urbanization is also creating two trends that are impacting India's domestic consumption habits:
Growing Middle Class
The households with annual earnings between US$ 5,000-10,000 have grown at a CAGR of 10% between FY
2012-2020 and their number is projected to further double by 2025 from 2020 levels. The households with annual
earnings between US$ 10,000-50,000 have grown at a CAGR of 20% between FY 2012-2020.
Increasing number of households with annual earnings of US$ 10,000 to US$ 50,000 has been leading to an
increase in discretionary spending on food and beverages, apparel and accessories, luxury products, consumer
durables and across other discretionary categories. The consumption pattern also has moved towards higher spend
on branded products and through organised channels.
Exhibit 8: Household Annual Earning Details
Households with Households with
Romer Total House annual earning % of total | annual earning US$ | % share of total
Holds (in million) | __ US$ 5,000 - Households 10,000 50,000 Households
10,000 (million) (million)
2009 236 36 15.2% 11 47%
2012 254 60 23.8% 22 8.7%
2014 267 71 26.5% 27 10.2%
2015 274 85 30.9% 36 13.2%
2018 295 121 41.2% 86 29.3%
2020* 310 132 42.5% 95 30.6%
Source: Economist Intelligence Unit, *Technopak Estimates
Nuclearization
The growth in the number of households exceeds population growth, which indicates an increase in nuclearization
in India. According to the 2011 census, 74% of urban households have five or less members, compared to 65% in
2001. It is expected that that smaller households with higher disposable income will lead to a greater expenditure
in, among others, jewelry, fashion, home and living, packaged food and food services.
Increasing Disposable Income
Due to the growing number of middle- and higher-income households and rising per capita income, consumption
of discretionary products is likely to grow. The World Economic Forum projects that high and upper-middle-
income groups will grow from 25% in 2019 to 50% of household by 2030.
REFORMS: CRITICAL TO CREATE DEMAND STIMULUS
Structural reforms are critical to harness dividends of positive demographics and urbanization and there are risks
if they fail to do so. In the last 10 years, government has pushed towards infrastructure investments in roads,
railways, defense, and power; public-private partnerships; smart cities; skill development; widening of domestic
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sustainable urbanization that provides affordable housing, improved public health metrics and mass transportation.
Many of these interventions continue to be work in progress and outcome on these initiatives will deliver the
advantages of urbanization and India’s demographic dividend towards sustained growth of private consumption
and its positive impact on discretionary purchases.
Make in India Campaign
Government of India launched ‘Make in India’ campaign in 2014 to boost the manufacturing sector, promote
foreign investments and reduce the dependency on imports with the primary goal of increasing the contribution
of manufacturing sector to India’s GDP to 25% by FY 2025. The government identified around twenty-five sectors
where progress was possible in the short-term, and the likelihood of FDI was high. Some of the key sectors are
leather, textiles, automobile and transportation, electrical and electronic systems, information technology,
biotechnology, pharmaceuticals, energy, and tourism.
India footwear industry, being the 2" largest producer of footwear globally, has benefitted tremendously with
100% FDI for leather products manufacturing via an automatic route. The government of India has also allowed
100% FDI in single-brand retail with a clause of 30% mandatory local sourcing. This, combined with the presence
of multiple production centres in the form of Mega Leather Clusters (MLCs) with all required infrastructure,
where investors can set up manufacturing units are some of the key reasons to invest in India. The preference for
Indian footwear brands has also significantly increased due to the emergence of new and traditional brands
keeping up with the latest trends. This has been possible due to an increased ease-of-manufacturing of Indian
footwear industry.
SECTION II: RETAIL MARKET IN INDIA
The retail market in India was valued at US$ 796 billion (% 59,70,000 crore) in FY 2020 and is expected to grow
at a CAGR of 6.23% to reach US$ 1,077 billion (% 80,77,500 crore) by FY 2025. Some of the factors that will
contribute to its growth are growing incomes, increasing working age population, shrinking household size,
urbanisation, heightened exposure through internet and the meteoric rise of e-commerce.
Exhibit 9: India’s consumption funnel (in US$ billion)
aaviveriant FY2015 Rae Bas Gao)
pp S&S € Gia > 713 — ass) a ET >) Cm)
Private 966 \ wy, 1,542 \e 2,267 /
Consumption \ x
mf /
1USS = 275
Source: Technopak Analysis
Exhibit 10: Country Wise GDP & Retail contribution (US$ billion)
USA China | Germany ] UK India
GDP 18,200 | 11,000 3,400 2,900 GDP 1,745
CY2015 FY2016
Retail 4,900 3,900 554 590 Retail 520
GDP 20,936 | 14,722 3,806 2,707 GDP 2,633
cy2020 FY2021
Retail 5,506 5,130 610 553 Retail 748
GDP 21,862 | 16,983 4,810 2,781 GDP 4,049
CY2024 FY2025
Retail 5,581 5,815 769 559 Retail 1,077
Source: Secondary Research, Technopak Analysis
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In FY 2020, India’s retail basket was approximately 48.5% of its private consumption and it is expected to
maintain roughly this share in private consumption for the next five years. The food and grocery (“F&G”) segment
forms the major share of India’s merchandise retail expenditure (approximately 66%), it has jumped to
approximately 73% amid the disruptions caused by COVID-19 in FY 2021. While other sectors in retail have
contracted by 25-30% during FY 2021 due to the impact of COVID-19, need based categories like food and
grocery and pharma retail have witnessed growth. However, the economic recovery post pandemic may lead to a
swift bounce back for discretionary segments as well including apparel and accessories and footwear. Footwear
retail market is expected to grow approximately at a CAGR of 8% during FY 20-25, and 22%% over FY21-25,
being one of the fastest growing discretionary categories during FY21-25.
Exhibit 11: Share of various categories in overall Indian Retail Basket (in US$ billion)
Categories FY2015 FY2020 FY2021 (P) | FY2025 (P) CAGR
FY21-25
Total Retail (US$ billion) 492 796 748 1077 9.50%
Need based Food and grocery 66.60% 66.10% 73.30% 63.30% 5.60%
Pharmacy and wellness 3.00% 2.90% 3.20% 3.30% 10.70%
Apparel and accessories* 8.40% 8.30% 6.00% 9.30% 22.20%
Jewellery 7.30% 7.50% 5.70% 8.40% 20.60%
Consumer electronics 5.90% 6.40% 5.70% 7.10% 15.90%
Discretionary | Home and living 4.50% 4.30% 3.00% 4.40% 20.30%
Footwear 1.30% 1.20% 0.90% 1.30% 21.60%
Others 3.00% 3.30% 2.20% 2.90% 17.15%
Total 100.0% 100.0% 100.0% 100.0%
“Accessories includes Bags, Belts, Watches and Wallets; Others include Books and Stationery, Toys, Eyewear, Sports Goods,
Alcoholic Beverages and Tobacco etc.
Source: Technopak analysis; Year Indicates FY, Note: 1US$ = & 75
KEY GROWTH DRIVERS OF THE INDIAN RETAIL INDUSTRY
Growing youth, working age population and increasing propensity to spend
The median age of 28.1 in CY 2021(E) and workforce share of 50% of the population is suggestive of a large
consuming youth population, consisting of both men and women, joining the workforce, and inclined to spend
their earnings on aspirational lifestyle. Unlike the earlier generation, the youth is predisposed towards branded
products and improved shopping experience and is continuously attempting to upgrade lifestyles.
Continuous exposure to content via television and smart phones
Exposure to content on television, OTT platforms, social media networking sites and other internet avenues are
making consumers abreast with global fashion and retail trends. Brands are also leveraging these platforms to
create seamless engagement with consumers. This exposure is elevating consumer’s enthusiasm for lifestyle
products and leading them to reconfigure their wardrobes and homes with different products for different
occasions.
Availability of quality products across value segments
Focussed approach towards offering consistent quality at affordable prices has been driving growth in the lifestyle
segment. The consistent delivery of this promise in tier II, III and IV cities has been aiding the transition of
consumers from the unorganised traditional shops to the organised value retailers.
(1) Growth in organised retail offering a great shopping experience
Entry of foreign brands, growth of organized retailers and proliferation of mall culture have conditioned the
consumers to the idea of a robust shopping experience with air-conditioned environment, facility of trial rooms,
wider product range, price transparency, quality assurance, on-floor service assistance.
(2) Emergence of E-tailing
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retail by FY 2025 from its share of 4.6% in FY 2020 (% 2,77,500 crore), expected to grow at rate of 23%. Between
FY 2015 and FY 2020, the e-commerce sales have grown at CAGR of 44%.
Retailers across categories are moving towards online channel to expand their offerings, to have a place in the
“Omni-channel Ecosystem’ where all channels of retailing are essential to reach to the consumers. The dividing
lines between offline and online retailing are blurring gradually, whereby consumers connect with brands through
any medium of their preference. A purchase made by a consumer is often a mix of various mediums. E.g., A
consumer searching online and reading reviews about a product before making a purchase decision, then going to
an offline store to look and experience the product, and the eventual purchase could be through either of the
channels. This makes presence across mediums essential of retailers to connect with the consumer at every touch
point.
Increase in penetration of smart phones and low-cost internet data has led to a boost in online retailing. Several
options of payment across various methods whether card, cash, wallets, and e-commerce transaction have
gradually built comfort and security in the minds of the consumers. As the disposable income is increasing, and
with increase in women employment, time paucity and convenience also led to the growth of e-commerce.
COVID, accelerated these changes and made companies and consumers alike to adapt to the online medium.
KEY TRENDS
(3) Consumers becoming more brand conscious
A fast-growing economy and burgeoning middle-class population exhibit a strong affinity towards branded
products. Exposure to global trends and fast dissemination of information has fueled the aspiration to be associated
with brands. Consumers also associate branded products with quality and performance. Besides the urban India,
the rural India is also contributing significantly to the growth of acceptance of branded products.
(4) Preference for Indian brands
Indian consumers increasingly want to buy products and brands that are made in India. Indian brands especially
in the value segment have developed distribution capability to address the dispersed demand, product
understanding and pricing framework for the Indian micro-markets. Indian brands also stand to gain where Indian
sensibility in design and aesthetics or Indian value system rooted in nature and sustainability is the key selling
proposition such as Good Earth and Fabindia in fashion lifestyle industry. Brands like Campus and Relaxo in the
footwear retail Industry are also examples of this trend. Campus is one of the very few established Indian brands
in a segment which is primarily dominated by international brands.
(5) Impact of social media
Use of digital media as a marketing tool is being adopted by all key players. Its wider reach and relatively lower
cost of customer conversion makes it a medium of choice. Adoption of social media by youth has given an
opportunity to brands to reach the consumers directly through targeted campaigns.
(6) Increasing spend on Health and Wellness
Health and wellness have become an important lever to drive premiumization, specially post COVID-19 as the
consumer has become more aware about health and fitness. This trend pervades across all segments of
consumption from food and grocery to lifestyle products and services. Sports and Athleisure products have
benefited from increasing consumer interest in exercise and sporting activity because of the health and wellness
trend, as well as the rising demand for comfort. It has become an important differentiator so much so that many
businesses have pivoted around this platform.
(7) Emergence of D2C brands
D2C is a strategy where companies sell their products directly to consumers, eliminate intermediaries. Brands
engaging this approach distribute their products via their own channels such as their own e-commerce websites,
other e-commerce platforms, social media, or own branded retail stores. The D2C model gives an advantage of
taking the product to the consumer in a shorter period compared to traditional channels and gives an opportunity
to directly engage with the consumers. Brands in all sectors of retail including FMCG, apparel and accessories,
footwear, home and living, consumer durables are foraying into direct selling, either completely depending on it
or complimenting it with other channels. In last few years, more than 800+ Indian brands have picked-up the D2C
retail channel to market and distribute their product. Companies like Boat, Intex, i-Ball, and Portronics in
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Bewakoof in beauty and fashion; and Urban Ladder, SleepyCat, and Wakefit in home and living; Elevar sports,
Neemans, Wrogn in footwear; Roadster, Harvard etc. in apparel — have adopted the D2C route to reach to their
consumers. The US brand Allbirds with a recent IPO valuation of USD 2.1 billion exclusively operates in the D2C
model, with approximately 89% of their US$ 219.3 million revenue (in 2020) coming from online channels.
(8) Premiumization
For nearly all retail segments, gradual escalation in Average Selling Prices (ASPs) contributes significantly to the
growth of the segment along with growth in absolute volume. As the Indian consumption growth story continues,
consumers remain in state of steady upgradation as corroborated by the response of businesses continuously
creating demand for niche products, sub segments and premium versions of products from packaged food products
to lifestyle products.
ORGANIZED RETAIL MARKET IN INDIA
While organized retail has been in India for 2 decades now, its contribution to total retail was low at 11.8% (US$
94 billion) in FY 2020. The organized retail penetration is expected to increase to approximately 20% by FY 2025.
Organised retail includes both modern brick and mortar retail (EBOs, MBOs, large format stores) and ecommerce
(Own website and marketplaces).
Exhibit 12: Overall Retail Market (US$ billion)
492
41
2015 2020 2022 (P) 2025 (P)
@ Overall Retail Organised Retail |
Source: Technopak analysis, Organised Retail Penetration
B&M: Brick and mortar
PENETRATION OF ORGANIZED RETAIL ACROSS CATEGORIES
Currently, the Food and Grocery segment forms the major share of the retail market (approximately 66.1%). Food
and Grocery will continue to be the dominant contributor in the retail market, however with a reduced 63.3%
share in FY 2025. Apparel and Accessories, Jewelry and Consumer Electronics are the other three key categories
which accounted 8.3%, 7.5% and 6.4% of retail respectively in 2020. All discretionary categories are expected to
grow faster than the overall retail growth thereby contributing a higher share in the retail market in the coming 5
years.
Exhibit 13: Share of Organized Retail in various Retail Categories
FY 2020 FY 2025 (P)
Organized ; :
Retail | %of | Market Retail) 9, gp Organized
Share of |. : : Share of | Size | Market ,
‘OF Isize (US$|Organized| Size - Organizea| Key Retailers
Retail [PO " Retail | (US$ ec! Size (USS
billion) | Retail | (US$ (USS | Retail | 57
wv billion) billion)
billion)
Food and) 610% | 526 | 4.50% 23.7 | 63.30% | 681 | 9.00% | 613 |Bi8 Bazaar, DMar,
Grocery Reliance Fresh
Jewelry 750% | 60 | 32.00% | 191 | 840% | 91 | 40.00% | 364 [Tanish, Kalyan
Apparel and| 8.30% | 66 | 32.00% | 211 | 9.30% | 100 | 44.70% | 44.7 |Central, Shoppers
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FY 2020 FY 2025 (P)
| Orecaued Retail Organized
Retail | %of | Market - % of
Share of | (usslorgaized| $i Share of | Size |) 7 94] Market | 1. etait
fem) PPE CeO ee || ques Pe eaqieg|| eee
billion) | Retail | (US$ bition | Reta ain
billion) lion) nD)
|Accessories* Stop, Lifestyle,
Westside, Zara, UCB,
\Titan
‘Bata India, Metro]
Footwear | 1.20% 10 | 30.00% | 27 1.30% | 14 | 38.00% | 5.3 |Shoes, Khadim,
Campus
Pharmacy
and 2.90% 23 | 10.00% | 2.3 3.30% | 36 | 19.60% | 7.1 |Apollo, MedPlus
Wellness
jc Vijay Sales, G
Se 6.40% 51 32.00% 16.3 7.10% 77 | 45.00% 34.5 eo oe ape
Electronics Reliance Digital
Home and) pages 34 15.00% 5.1 4.40% | 47 | 30.00% | 141 |Home Centre, Home
Living Stop
Others 3.30% 26 | 14.00% | 3.7 2.90% | 31 | 22.00% | 69
Total 100% | 796 | 11.80% | 94 100% | 1077] 19.50% ] 210
“Accessories include Bags, Belts, Wallet and Watches
Others include Books and Stationery, Toys, Eyewear, Sports Goods, Alcoholic Beverages and Tobacco etc.
Source: Technopak Analysis, Note: 1 US$ = @ 75
Exhibit 14: Share of Brick and Mortar and E-commerce across Categories
FY 2020 FY 2025 (P)
Betail | suareef | Share of | Share ot Retail Size| Share of | Share of
Share of| Size as Share of as Share of E-
/ traditional] _B&M E- ‘OF) (USS | traditional | B&M
Retail | (USS 2 5 Retail ae ri ., | Commerce
a retail | Retail commerce billion) | retail | Retail
billion)
Food and] : sa :
4 66.10% | 526 | 95.50% | 4.00% | 0.50% | 63.30% | 681 91.00% | 5.00% | 4.00%
Grocery
Jewellery 7.50% | 60 | 68.00% | 28.00% | 4.00% | 8.40% 91 60.00% | 33.00% | 7.00%
Apparel and
Ppa | 830% | 66 | 68.00% | 14.50% | 17.50% | 9.30% 100 55.00% | 23.00% | 22.00%
|Accessories*
Footwear 1.20% | 10 | 70.00% | 14.00% | 16.00% [1.30% 4 62.00% | 16.00% | 22.00%
Pharmacy and) 5 49% | 23 | 90.00% | 7.80% | 2.20% | 3.30% 36 80.40% | 11.20% | 8.40%
Wellness
eonsumes 6.40% | 51 | 68.00% | 4.70% | 27.30% | 7.10% 7 55.00% | 9.00% | 36.00%
Electronics
iit d
ioe an’ 4.30% | 34 | 85.00% | 7.70% | 7.30% | 4.40% 47 70.00% | 11.00% | 19.00%
Others 3.30% | 26 | 86.00% | 5.30% | 8.70% | 2.90% 31 78.00% | 11.00% | 11.00%
Total 100% | 796 100% | 1077
“Accessories include Bags, Belts, Wallets and Watches
Source: Technopak Analysis, Note: 1US$ = & 75
SECTION III: Global Sports and Athleisure Market
GLOBAL PERSPECTIVE OF SPORTS AND ATHLEISURE RETAIL MARKET
The global sports and athleisure market is projected to grow at a CAGR of 6-8% during the next five years. It
broadly comprises of apparel, footwear, and gears. While USA is said to be the largest market for this segment,
the Asia Pacific countries are expected to be the fastest growing markets in the coming 5 years.
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incorporate sports and fitness activities into their daily routine. This increased participation which has led to a
change in market dynamics, leading to an increased demand for athleisure products.
(9) Sports Participation Rate
Approximately 33-35% of the world’s population is estimated to regularly participating in some or the other form
of sports. There has been increasing participation in sports across the world. From global sporting events like
Olympics to Wimbledon or FIFA World Cup to ICC Cricket World Cup, global sporting events have often been
the centre for cultural connection and helping boost the global economy. Sports and physical activity are also a
high driver not just of physical health but also positive mental health.
In terms of sports participation rate, Australia and New Zealand have a very active population with a sports
participation rate of approximately 75%, followed closely by USA with a participation of approximately 51-53%.
USA dominates the global sporting arena with high focus on professional sports, with athletic talent valued at
early age and large number of colleges ready to nurture the next generation sports persons. Similarly, in China the
sports participation is quite high with the government’s focus and plans to create a sizeable sports industry. The
level of sports participation is approx. approximately 32-40% in China and continues to grow.
The overall effect can be seen across the globe as it has become very popular to wear sports clothing in everyday
life, a tread commonly known as athleisure. Big brands like Nike, Adidas lead the way in support with home
grown brands like Anta, Li-Ning, Puma, Campus, Sparx, HRX, Under Armour and others
In India, the sports participation rate in less than approximately 6% signifying low awareness and knowledge of
sports in the country. Issues like gender discrimination, socio-economic factors, financial conditions, and cultural
barriers obstruct sport development in India making it difficult to achieve the sports penetration in the nation.
However, in the recent past, there has been more focus and government spending and India has moved towards
being a multi- sport country and is witnessing high growth that will continue in the years to come.
Exhibit 15: Global Sportswear and Athleisure Retail Market — FY 2020
North &
Central
America
Western Europe
WS&A- Footwear (USD Bn) m S&A - Apparel & Gear (USD Bn)
Source: Technopak Analysis
Exhibit 16: Global Sportswear and Athleisure Retail Market — FY 2020
Total Retail FY] ss sswear and Athleisure | Per Capita Expenditure in | % Share in Global
2020 (USD Retail (USD billion) Sports and Athleisure Sports and Athleisure
billion) (Usb) Retail
Global 334.7 100%
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Footwear
Production
China is the leading footwear producer
India is the second largest footwear producer after
China
Share of
Footwear retail
in Total retail
Yearcon, Belle International
Share of footwear retail in total retail for
China market is like Indian market which is
1.2% with key players like Anta, Li Ning,
Share of footwear retail in total retail for Indian market
is 1.2% with key players like Bata, Campus, Metro
shoes, Khadim etc. dominating the Indian market
brands like Anta, Li Ning, etc.
Athleisure market in China grew at a CAGR
Athleisure of 24% over 2005-15 with better consumer
Market purchasing power and rise in the sales of
The Indian athleisure market is expected to grow at a
similar rate like China. The athleisure market is
growing at a CAGR of ~15% in 2015-20 and is
expected to grow at a rate of ~16% till 2025.
Manufacturing | like Anta, Li-Ning, Fila and others.
Footwear China is also the home of top manufactures
India is amongst the top manufacturers for global
brands such as Nike, Puma and Adidas, with over 80%
of their products being outsourced and manufactured
in the Asia-Pacific (APAC) region
ANTA SPORTS PRODUCTS LIMITED
Anta Sports, primarily into manufacturing and retailing of sports and athleisure wear has built up its capabilities
across the entire supply chain, from research and development to design, manufacturing to the distribution
network, with an omni channel approach and focused D2C model. Anta’s total research and development spend
during the year 2019 was USD 123.3 million (2.3% of Revenue) and USD 136.1 million (2.5% of Revenue) during
the year 2020 respectively. Anta has emerged as the market leader not only in the domestic market but also in the
international market becoming a market leader in world’s 2nd most populous and export-oriented economy.
Fast track growth trajectory since the public listing: Founded in 1991 and listed on the HK stock exchange in
2007. From a revenue of almost USD 200 million in FY 2007, it is today world’s 3rd largest sportswear company
by revenue after Nike and Adidas.
Exhibit 19: Revenue and Profitability Growth
FY 2015 (billion USD) FY 2020 (billion USD) CAGR 2015-2020
Revenue 1.7 Se 26.18%
Profit 0.8 1.4 12.09%
Source: Annual Report, Note: USD ~ 6.45 RMB
Exhibit 20: Revenue by Categories (FY 2020)
Total Revenue: USD 5.5 Bn
Accessories
3%
Apparel
61%
Per Capita
Footwear
36%
Source: Annual Report
Multi-Brand Portfolio to address all segments and niches:
Anta has 3 business groups to facilitate multi-brand strategy:
Performance Sports Group: Anta, Anta Kids, Sprandi
Fashion Sports Group: Fila, Fila Fusion, Fila Kids
Outdoor Sports Group: Descente, Kolon Sport
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India 796 2.6 19 1%
China 5,130 48.3 33.8 14%
USA 5,506 75.0 2273 22%
Germany 610 11.0 131.0 3%
UK 553 15.0 220.6 4%
Source: Technopak Analysis
The Indian sports and athleisure market is estimated to be = 19,500 crore in FY 2020 and is expected to grow at a
rate of approximately 16% by FY 2025, almost doubling in size. There is a high level of under penetration of
sports and athleisure footwear in India compared to global trends, leaving a huge opportunity for the key players
to explore and grow in the segment with new designs and products.
(10) Sports and Athleisure Retail Market in China
The domestic sports and athleisure market in China is estimated to be ~USD 48 billion in FY 2020. It is expected
to sustain growth of ~10% growth till FY25, above that of most other countries. It is the second largest market
after the US and continuously consolidating share in its favour. While the big names Nike and Adidas have been
dominating the market, domestic brands including Anta and Li Ning have witnessed dynamic growth in the last
few years because of products upgradation and consumers’ growing patronage towards Chinese brands.
Historically, Chinese companies had taken a backseat in the eyes of Chinese shoppers. But in recent years, Anta
has benefitted from a burgeoning preference among Chinese shoppers for homegrown names, allowing it to
capitalize on the growing Chinese sportswear market.
Exhibit 17: India and China Sports and Athleisure Retail Market (In USD billion)
jeoe-== <_< vis —
FY 25P
oe ene ae 1 Fy20 I Wie roms 8,085 10,484
Capita 1 4,751 i y 15,855
1,574 1 2099 | 2715 "
(usb) 2 |= I 5.4 I
a 1a ff
2015
82
A
11.3%
15.74 =
12%y 48
26 I
14.8% 24.3%
27
13
24.0%
0
2025P 2005 2 2025P
20;
mAthleisure RParket in india OW Athleisure Market in China
Source: Secondary Research; Technopak Analysis
FY 20 for India ~ Mar 19 to Apr 20
FY 20 for China ~ Jan 20 to Dec 20
Exhibit 18: USA - Per capita GDP for the same period (USD)
GDP Per Capita
(usp) 2005 2010 2015 2020
us 44,115 48,467 56,863, 63,544
Source: Technopak Analysis, GDP per capita IMF
In China, the athleisure market grew at CAGR of approximately 24% during the ten-year period from 2005 to
2015 with expansion in consumer spending power. Leading brands like Anta, Li-Ning, etc. captured a large share
of the market. Indian per capita GDP today is broadly where China’s was in FY05. The Indian athleisure market
is expected to witness similar growth in the next few years due to rising incomes and spending power, favourable
trends for athleisure, and shift in the consumer buying preferences, among several other growth drivers. The Indian
market was growing at CAGR of approximately 14.8% in FY15 to FY20 and is expected to grow at a CAGR of
approximately 16% till FY25.
Trends China India
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Exhibit 21: Brand Positioning Grid
Mid to High-end =
ae FE) orm ER
ana FILA
ANTA FILA
Functional sportwear for
Fashion sportsclothing
Running, crosstraining,
High-end Market SS a basketball, etc. = 1
el Ca ~ kids KID 8
FIA ANTA KIDS
Kid’s sportswear PLA ADs
Kid’sfashionsports
clothi
OIGH SFORT
bia Poet FILA FUSION
Mcrae ‘ieee Youth's trendy clothing
product
~~ DESCENTE
N kids: ANT
' | | .
Fashion Casual Fashion Composite/Performance DESCENTE
Wear Brand Sportswear Sportswear Brand Performance sportwear
Bex for skiing, crosstraining
and running
Source: Annual Report
Exhibit 22: Store Split and Revenue Split by Brands (FY 2020)
Total Number of Stores: 12,260 Total Revenue: USD 5.5 Bn
Ke
Fila
50%
Source: Annual Report
Retail Journey: From Distribution led Approach to D2C
Anta’s business adopted a wholesale distribution model in China market and for more than 20 years this
model has been effective in promoting the Anta business through a nationwide coverage that fulfilled
different local business cultures and consumer preferences. However, as consumer habits are changing
rapidly, Anta initiated the DTC model transformation in China to more effectively connect the information
flow of the value chain from production to consumer.
The group had more than 12,260 stores in China by FY 2020, up from 9,080 in FY25 implying a CAGR
of 6.2%.
Anta largely works though its offline network, about 70% of Anta sales are through brick and mortar stores
and the rest comes from online platforms like Tmall, WeChat, etc. Anta has increased its sales by
approximately 40% Y-o-Y with support of online channels.
Key markets for Anta vary from Tier 1 and Tier 2 to Tier 3 and Tier 4 to lower tier cities based on the
brand portfolio of the company. Anta Kids target the mass market and majority of their stores are in Tier
2 to lower tier cities. However, portfolio brands like Fila and Kingkow target the Tier 1 and 2 cities.
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e — Anta focused on sports brands and acquired them to capture markets across value segments and niches.
(i) The company acquired sportswear brand Fila’s China business in 2009. The approach placed Anta as
amass market brand while Fila targeted the high-end sports market.
(ii) The company also operates Descente and Sprandi stores in China
(iii) In July 2015, Anta acquired Henan Material, which manufactures shoe sole in the PRC.
(iv) In 2017, Anta Sports acquired the business of KINGKOW and formed a joint venture company to
operate Kolon Sport business in China, Hong Kong, Macao and Taiwan.
(v) A consortium led by China's Anta Sports acquired Finland's Amer Sports that has internationally
recognized brands including Salomon, Arc’teryx, Peak Performance, Atomic, Suunto, Wilson in
2019. Fila contributed more than 50% of the total revenue in FY 2020.
Consistent Brand Management
. Anta sponsored the Sydney Olympic Games in 2000 that helped Anta move to international markets
. In 2008, the Beijing Olympics gave Anta another opportunity to bolster its presence.
. Anta is also the strategic partner for Chinese Olympic committee and will sponsor the winter Olympic
games in Beijing in 2022.
LI-NING COMPANY LIMITED
Fast track growth trajectory since the public listing: Founded in 1989 and listed on the HK stock exchange.
The company is engaged in designing, developing, manufacturing, and marketing of professional sporting
products including footwear, apparel and accessories, Li-Ning as of November 2020 ranked as the number one
domestic brand in the sports category in China during the 11.11 shopping festival organized by Tmall and Taobao.
Li-Ning’s total research and development spend was USD 56.2 million (2.6% of Revenue) and USD 50.1 million
(2.2% of Revenue) in FY 2019 and FY 2020 respectively.
Exhibit 23: Revenue Growth
FY 2015 (billion USD) FY 2020 (billion USD) CAGR 2015-2020
Revenue 1.14 2.09 12.88%
Source: Annual Report, Note: USD ~ 6.45 RMB
Exhibit 24: Revenue by Categories and Store Split (FY 2020)
Total Revenue: USD 2.09 Bn Total Number of Stores: 6,933
Accessories
5%
Footwear
43% Directly-
operated
Apparel 16%
51%
Source: Annual Report
Retail Journey
. Li-Ning strategy of “Single brand, Multi-categories, Diversified channels” has helped the group to
strengthen the core business. The group has focused on product functions and technological innovation
with analysing fashion trends and sports cultures, striving to provide consumers with diversified
consumption experience, enhance consumer loyalty and strengthen brand influence.
. Li-Ning remained focused on the multi-channel strategy for distribution of goods and for more than 20
years this model has been effective in promoting the Li-Ning business through a nationwide coverage that
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changing rapidly, Li-Ning initiated the digital transformation to establish a strong online presence. For Li-
Ning, e-commerce has risen to the second-biggest distribution channel with approximately 30%
contribution to growth from e-commerce
The group had more than 6,933 stores in China by FY20, up from 6,133 in FY15, a CAGR of ~2.5%.
Li-Ning focused in the multi-channel strategy and enhanced the cooperation with high quality retailers,
which has optimized the efficiency or retail channel and improved the quality of market coverage.
Majority of Li-Ning stores are directly operated stores located in metro and top tier cities.
Consistent Brand Management
Li-Ning sponsored the athletes and sports teams both in China and overseas to bolster its presence. For
example, in 2016, it signed a sponsorship deal with Indian Olympics Association for Rio 2016 summer
Olympics.
Li-Ning is also in the strategic collaborations with NBA, Association of Tennis professionals, Chinese
university of basketball and football association.
Exhibit 25: Revenue Evolution of Key Footwear Players in China
(RMB $mm) FY2005, FY2020 CAGR FY 2005-2020
‘Anta 670.0 35,512.0 30.3%
Li-Ning 2,451.0 14,457.0 12.6%
Exhibit 26: Key Asian Players in Sports and Athleisure
Count Price | Number | Revenue
"'Y | Establishment Sports 2020
Brands of car Footwear | Apparel | “C’. | Range | _ of (usp | Presence
Origin u (US$) | EBO’s
bn)
Anta Sports | China 1991 v v v a 12,260 | 5.50 | Worldwide
. 5 53- :
Li Ning China 1990 v v iD * 2.23 | Worldwide
50- ;
Asics/Onitsuka | Japan 1949 v v v 370 : 2.99 | Worldwide
, 65- s
Fila Korea 1911 v v v 13g | 200 2.69 | Worldwide
AED China 2001 v v - - 1.26 | Worldwide
International
361D Chi 2003 v v 80: gay | Stinaand
egrees hina 160 : . India
‘America,
5 at 69- < Europe,
a "I
PEAK Sport* | China 1989 v v sso | 5000 | 0.20 ‘nate, and
Australia
‘Campus India 2005 v 5-48 50+ 0.09 India
heey once | India 1990 iH 7-48 | 396 | 0.06** India
HRX India 2013 v v v 8-68 2 0.07 India
*Peak Sport data is of 2016 as it was acquired by Amer sports corporation post that
** Turnover for the company which hasa large share of footwear in casual, fashion and school segments apart from sports and athleisure
footwear
Source: Secondary Research
Revenue 2020 for International Brands
Revenue 2020 for Indian Brands
FY 2020 is Jan 20 to Dec 20
FY2021 is April 20 to Mar21
Exhibit 27: Market Cap of Key Players in Sports and Athleisure
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10Y Ranking of Largest Listed Sportswear Brands (by Market Ca CapCAGR —($bn)
1 fib 19.7% 216.3
14.6% 57.6
32.2% 43.1
43.4% 29.7
14.3% 18.1
11.3% 9.5
a 14.1% 64
27.8% 61
7.2% 47
9.9% 18
Nov-11,
Nov-12
Nov-13
Nov-14.
Nov-15
Nov-16
Nov-17
Nov-18,
Nov-19
Nov-20
Nov-21,
Source: Secondary Research
Note: (1) Market capitalization for each year is basis the figure as on November 30" of the respective year
SECTION IV: SPORTS AND ATHLEISURE RETAIL MARKET IN INDIA
India is mirroring the global trend with respect to sports and athleisure and has outpaced the global growth rate of
the segment. It is estimated to be = 19,500 crore (USD 2.6 billion) in FY 2020 and is expected to grow at a rate
of approximately 16% by FY 2025, almost doubling in size. With increasing discretionary incomes and heightened
awareness about heath, wellbeing and fitness coupled with growing infrastructure to support sports and physical
activities and entry of brands across price points had propelled consumers to spend on such products.
The key categories in the segment are:
1. Apparel
2. Footwear
3. Gear (Yoga mats, health equipment’s, gym gloves, belts and other things like skipping rope etc.)
While sports and athleisure footwear has been around since last few decades and has been widely adopted across
city tiers since last 2 decades, sports and athleisure apparel has picked up paced only in the last few years. Gears
still remain to be a small category, largely unbranded and highly fragmented. However, players like Decathlon
are conditioning consumers to buy the right products and are making them available as a one stop solution.
Exhibit 28: Sports and Athleisure Retail Market in India (in % crore)
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22,000
ore
ro ye
tt 7 etme a5 5 ow
o® e 830 oe
11,000 wey, °
—450— a 18% 9000 &
5620 °° Sr ote
FY 2015 FY 2020 FY 2021 FY2022P FY 2025P
wApparel © Footwear = Gear
Source: Technopak Analysis
By usage, sports and athleisure is the fastest growing category in both apparel and footwear, growing at a CAGR
of approximately 16% between FY20 and FY25, followed by casual and formal which are growing at 9% and 5%
respectively over the same period. This is resulting from the gradual cultural transformation from formal and rigid
dressing codes to a casual and fluid dressing culture blurring the lines between the two. This has been further
propelled by COVID-19 wherein consumers have eased into working from home and step out for casual outings,
thereby promoting adoption of athleisure apparel and footwear.
Exhibit 29: Category Segments - By Usage (% crore)
FY 2015 FY 2020 FY 2021 FY 2022 FY 2025P.
= Casual Formal = Sports and Athleisure
The category segments include Apparel, Accessories, Footwear and Gear
Source: Technopak Analysis
Key Players
. Sport and Athleisure centric Players: Players fulcrumed around sports and athleisure apparel, footwear
and gears such as Adidas, Puma, Campus, Reebok, Nike, Skechers, Under Armour, Asics, Decathlon,
New Balance,
. Footwear retailers offering sport and athleisure footwear category: Bata (Power), Liberty (Force10),
Relaxo (Sparx) and Mirza International (Red Tape Athleisure and Bond Street)
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Biba and Go Colors
Prominence for today’s consumer
Athleisure was a megatrend before COVID-19, but the pandemic has served to further blur the dividing
lines between work and free time, and there is a rising acceptance of comfortable wear in previously
more formal contexts. With fashion brands increasingly entering this segment, sports goods players also
need to leverage their innovation abilities and market knowledge. Activities such as yoga, Pilates, home
workouts, running, walking have gained wider acceptance leading to increase in sales of related products
like running shoes, walking shoes, work out apparel, yoga pants etc.
Increasing discretionary incomes and growing global exposure has conditioned consumers to adopt
global trends, follow global athletes and fitness influencers. Digital training sessions and monitoring of
milestones have also gained prominence. All these factors coupled with proliferation of global and home-
grown brands and private labels across price points have made the smart products accessible to
consumers at relevant pricing.
KEY GROWTH DRIVERS AND TRENDS
Democratization of sports: Proclivity towards sports and physical activities has been on a steady growth.
Enthusiasm for sports is now moving beyond cricket and the well-heeled. It is on account of the following factors:
Sporting leagues favorably impacting the sporting arena: The Indian Hockey Federation had
conceived the Premier Hockey League (field hockey) in 2005. Indian Premier League (IPL) got
established in 2008. Over 12 national professional sports leagues exist in India now, each at different
levels of evolution. They attract the best of talents from across the world, which leads to massive
television viewership not only in India but also globally, resulting in heightened awareness and
enthusiasm about sports.
Sports stardom igniting aspiration in the Indian crowd: The Indian sports journey began with the
likes of the Milkha Singh, Dhyanchand, P.T. Usha and other sports persons, who bagged glorious
victories despite humble backgrounds. Then, the laurels of the highest stature were won by the young
brigade like Saina Nehwal, P.V. Sindhu, Abhinav Bindra, Sania Mirza, etc. More recently, with seven
medals in the Tokyo Olympics 2020, not only have the athletes made India proud but also inspired parents
to support their kids in pursuing several sports. This is seen as a potential gamechanger that can help
revive the sports culture and lay the foundation for India to produce many more champions in the future.
The emergence of these new heroes and their humble beginnings has rekindled appreciation for sports
and outdoor activities.
Academic and training focus on sports: The lack of infrastructure in sports has always been an issue
in the country. However, last decade has witnessed the development of several government and private
sports academies, training centers, sports excellence centers to promote sports in India. Initiatives by the
government, private bodies and individuals are yielding positive results in strengthening the sports
culture in India. This augurs well for various stakeholders including sporting good players.
Ability of home-gown brands to address the underserved demand: The market skimming approach of the
premium global brands present in India has left the Indian market largely unaddressed. The ability of the home-
grown brands like Campus and Relaxo to capture the eye of first time consumers of branded footwear, and address
buying across a consumer’s journey across mass segments as well as more aspirational buying in semi-premium
segments, based on market knowledge, supply chain efficiencies, access to markets and price advantage presents
a large sized opportunity to them. Reviewing the product strategy and recalibrating the prices can help the value
players meet the demand at the right price.
Exhibit 30: Premium and Value Brand - Scale Comparison
FY 2011 FY 2015 FY 2020
Revenue Number of Revenue Number of Revenue Number of
crore) Stores @ crore) Stores @ crore) Stores
Nike NA NA 704 200 760 123
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Relaxo 686 127 1,481 207 2,410 390
Source: Annual Report, MCA Report, Secondary Research
Emerging sub-segments: The transformative external forces are bolstering the development of several sports and
outdoor activities. Brands have identified these niches such as Speedo in the space of swimwear, Quick Silver for
water sports, Callaway and TaylorMade for golfing equipment’s etc. Yoga bottoms have become all pervasive so
much so that along with sports and athleisure players, ethnic wear players like W, Biba, lingerie and lounge wear
brands like Jockey, retailers like Westside and Lifestyle have added it to their offering.
Health Awareness: COVID-19 pandemic has brought about a significant change in the Health and Wellness
Industry, giving it a boost by making Indian consumers aware about the benefits of health and wellness. Businesses
have adapted to the new normal by implementing doorstep delivery and e-retailing due to Indian government’s
push to prefer e-commerce as a major distribution channel to maintain social distancing.
Growing awareness towards health and preventive care is driving wellness as well as fitness category. Within
Packaged Food and beverages, products such as Organic Staples, Organic Beverages, Concoctions, Immunity
boosting products, Nutraceuticals, etc. saw high growth. There has been a rise in health conscious individuals in
India with fitness related products such as sports footwear emerging as the biggest beneficiary of this trend.
Exhibit 31: Number of Health-Conscious Individuals in India (2018-2025) (in million)
Number of Health Conscious Individuals in India 142
130
150 108
100 20
. J
0
2018 2020P 2022P 2025P
In FY 2025P: Share of Total Number of Health Conscious Individuals in India
Metros and Mini Metros* — 34%, Rest Of India- 66%, * Delhi NCR/ Mumbai/ Kolkata/ Bangalore/ Chennai/ Hyderabad/
Pune/Ahmedabad
Source: Technopak Analysis
Additionally, changing market trends towards relaxed clothes with the increasing need for fashion, particularly at
workplaces and social gatherings are important factors driving demand in the market. The growing awareness for
a healthy lifestyle is leading to the adoption of physical fitness services and activities, thereby enhancing growth
in the athleisure market. Health and Wellness proxies are growing at double digit CAGR since 2015 and will
continue to grow at the same rate for the next 5 years.
Exhibit 32: Health and Wellness proxies (% crore)
Market Size crore.) CAGR
FY2015 FY2020 FY2025 (FY2020-FY2025)
‘Nutraceuticals (Dietary) 12,750 31,500 77,250 19.7%
Nutraceuticals (Functional Food) 8,250 21,750 51,750 18.9%
Organic Food 820 2,160 6,350 24%
Sports and Athleisure Footwear 5,620 11,000 22,000 14.4%
Wearable Fitness Devices 824 4,935 28,341 42%
Source: Technopak Analysis
SECTION V: FOOTWEAR RETAIL MARKET IN INDIA
The domestic footwear retail market in India estimated at = 72,000 crore in FY 2020 is projected to grow at a
CAGR of ~8% to reach % 1,05,000 crore by FY 2025. Footwear industry in India has grown at a CAGR of ~9%
over FY2015 to FY20. India is one of the largest producer and consumer of footwear in the world, generating
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share, however growth in women’s footwear segment will outpace the growth in men’s to account for an almost
equal share by value in FY 2025 against the current share of 41%. While casual segment is the largest segment
accounting for almost 67% of the total market in FY 2020, sports and athleisure is one of the fastest growing
segments.
Further growth will be driven by
. Increased adoption owing to versatility in usage and emergence of sub-segments such as sports and
athleisure, outdoor etc.,
. Increasing middle class population and working population resulting in increasing disposable income of
consumer and higher spending on lifestyle products; leading to shift from unbranded to branded play
driving the average selling price of the segment.
. Increase in number of working women driving the growth of women’s footwear market.
. Increasing urbanization and more focus towards branded footwear and organized retail.
. Easy availability and assortment width with the advent of online channel.
. Surge in sale of sports and athleisure footwear with increasing focus towards sports and events such as
marathons and adventure trips.
Exhibit 33: Footwear Retail Market in India (Value in @ crore)
1,05,000
elo
72,000 xt
So "339,
47,500 othe 7 48,000 36°
64,800
FY 2015 FY 2020 FY 2021 FY 2022P FY 2025P.
Source: Technopak Analysis
Given the muted consumption in FY 2021 due to restrictions in movement due to COVID-19, the footwear retail
market in India contracted by approximately 33%. However, as the growth momentum is picking up, rapid
recovery is expected with the segment growing at a CAGR of approximately 22% between FY 2021 and FY 2025.
Exhibit 34: Footwear Retail Market in India (Volume - Number of pairs in Million)
3,052
2,628 ate
°/ .s
2aza 5 2199
as
ane
1680
FY 2015 FY 2020 Fy 2021 FY 2022P FY 2025P.
Source: Technopak Analysis
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Exhibit 35: Share of Branded Footwear and Organized Footwear Retail as a percentage of Footwear Retail
Market by value
INR 47,438Cr INR 72,000 Cr INR 48,000 Cr INR 64,800 Cr INR 1,05,000 Cr
9
44% 46% are 50%
40% 38%
30% 33% 34%
i?
FY 2015 FY 2020 FY 2021 FY 2022P. FY 2025P.
= Branded Footwear Organised Footwear
Source: Technopak Analysis
Branded footwear signifies registered trademarks that are regularly patronized by customers and that are sold through both
organized retail and trade channels. Organized retail signifies formal retail channels of Exclusive Brand Outlets (EBOs),
Large Format Stores (LFS), E-commerce etc. Footwear retailed through these organized retail points of sales is necessarily
branded. Therefore, organized share is less than the share of branded footwear in total share
In FY 20, the organised footwear retail signified by exclusive brand outlets (“EBOs”), large format stores (“LFS”)
and e-commerce contributed a share of ~30% by value and ~13% by volume (number of pairs) to the total footwear
retail market, corroborating the greater throughput of premium products through organised channels. Growing at
rate of 13%, well above the growth rate of the overall category, the organised retail is expected to gain a share of
38% by value in the coming five years. The footwear segment is characterised by fairly high branded play
compared to other lifestyle categories. The branded segment projected to grow at a rate of 11% by value in the
coming 5 years is expected to gain a share equal to that of the unbranded segment by value by FY25.
GLOBAL FOOTWEAR RETAIL MARKET
Exhibit 36: Size of Footwear Retail in various Countries (CY2020 Data, USD billion)
Western Europe
@ Footwear Retail Market Size (USD Bn)
Exhibit 37: Share of Footwear Retail in various Countries (CY2020 Data, USD billion)
Retail] ootwear Retail Share of
Country | Market Footwear Key Players
‘ Market Size 4
Size Retail
USA 5,506 60.6 1.1% ‘New Balance, Steve Madden, VF Corp
China 5,130 61.6 1.2% Anta, Li Ning, Yearcon, Spider King, Belle International
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Retail ; Share of
Footwear Retail
Country | Market - Footwear Key Players
zi Market Size :
Size Retail
Germany 610 11.6 1.9% Ash, Bugatti, Bufallo, Caprice
India 796 9.6 1.2% Bata India, Campus, Metro Shoes, Khadim, Relaxo
UK 553 94 1.7% Dr. Martens, Hunter Boots, and Clarks
Source: Technopak Analysis
Exhibit 38: Annual Footwear Consumption (Number of pairs in million) - Across Key Developed and
Developing countries (FY 2020)
4,110
2,391 2,600
420 451 wes l l
= = & m i
UK Germany Japan Brazil Indonesia India China
Source: Secondary Research
The global average annual footwear consumption per capita is estimated to be approximately 3.2 pairs. India’s
annual footwear consumption per capita is very low, compared to developed and other developing countries, at
approximately 1.9 pairs suggesting headroom for growth.
Exhibit 39: Annual Footwear Consumption (Number of pairs) per capita — Across Key Developed and
Developing countries
Japan Germany Brazil Indonesia China India
Source: Tap ana
SEGMENTATION OF FOOTWEAR RETAIL MARKET IN INDIA
Segmentation by Customer Demographic
Historically, the footwear category in India has been dominated by men’s products accounting for more than 50%
of the footwear retail market by value until FY 2015. However, women’s and kids’ segment have been growing
at a faster pace as compared to men’s segment to account for 40% and 10% of the market respectively in FY 2020.
By FY 2025, women’s segment will have inched closer to be at par with the men’s segment in terms of value. The
growth in women’s segment will be driven by increasing number of working women and increasing disposable
income. Also, women tend to possess a greater number of pairs for different occasions driving volume growth.
Market for kids’ footwear is growing rapidly with increasing number of working parents resulting in higher
spending on kids. Also, with the advent of activity-based learning in schools, different shoe types are needed for
varied different activities. Penetration of organized retailing continues to be higher in men’s footwear as compared
to women’s and kids’ owning to the dominance of retail led players like Bata, Mirza International and many others
in this segment. The adoption of branded products happened much earlier in the men’s segment as compared to
that in other segments.
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Exhibit 40: Customer Segment Split in Indian Footwear Retail Market
INR 47,438 Cr
INR 72,000 Cr
INR 48,000 Cr
INR 1,05,000 Cr
~A0%
Th
FY 2015
Source: Technopak Analysis
= Men's
~-36%
~-30%
52%
FY 2020
Women's
FY 2021
26%
ATI
_ EB
CST
FY 2025P
eKids
Exhibit 41: Penetration of Branded Footwear across Customer Segments in Indian Footwear Retail Market
—By Value
Men
INR 25,615 INR 35,712 INR 46,725
cr cr cr
eatle of
Peo ~ 10% fad eo badd
FY 2015
Branded
FY 2020 FY 2025P
Unbranded
Women
INR 17,550 INR 28,800 INR 45,885
cr cr cr
986 Th
clo FG
Ashe Aa TE
ay
FY 2015 FY 2020 FY 2025P
Branded» Unbranded
148
Kids
INR 4,269 INR 7,488 Cr INR 12,390
cr cr
UAN ~8%
ASTe
FY 2015 FY 2020 FY 2025P
mBranded © Unbranded
Source: Technopak Analysis
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Exhibit 42: Penetration of Branded Footwear across Customer Segments in Indian Footwear Retail Market
- By Volume (Number of pairs)
Men Women Kids
70Cr 80 Cr 85 Cr 92 Cr 122 Cr 138 Cr 55 Cr 61Cr 82Cr
plo 0% 1%
ale 6%
60
3h Atle 9% AA
a *E~
al
FY 2015 Fy 2020 FY 2025P FY 2015 FY 2020 FY 2025P. FY 2015 FY 2020 FY 2025P
Branded = Unbranded mBranded » Unbranded Branded » Unbranded
Source: Technopak Analysis
SEGMENTATION BY USAGE
Indian footwear retail market is loosely defined around formal or dress, casual, sports and athleisure and outdoor
segments. While casual segment is the largest segment accounting for almost 67% of the total market in FY 2020,
sports and athleisure is the fastest growing segment gradually consolidating market share. Health, fitness and well-
being have become an important pivot for most retail categories including food and grocery, apparel and
accessories, footwear, gadgets etc. Footwear is mirroring that trend, with sports and athleisure footwear expected
to double itself in value from % 11,000 crore in FY 2020 to reach a market size of ~% 22,000 crore by FY 2025,
growing at a CAGR of ~15% between FY 2020 and FY 2025. Further, the branded sports and athleisure footwear
segment is also expected to grow at a CAGR of ~17% during the same period.
Exhibit 43: Usage wise Split in Indian Footwear Retail Market
INR 47,438 Cr INR 72,000Cr INR 48,000Cr INR64,800Cr INR 1,05,000
ee ee
-TY hele
12% Ab» egg | --AB 19% 87 . 19% —_pare 219%
ee
FY 2015 FY 2020 FY 2021 FY 2022P FY 2025P
=Casual © Sports & Athleisure = Formal = Outdoor
Source: Technopak Analysis
Penetration of Brands
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Exhibit 44: Penetration of Branded Products across Usage Types in Indian Footwear Retail Market - By
Value
Casual Sports and Athleisure Formal Outdoor
32,750 48,000 ~—-«65,800 5,620 11,000 22,000 6,275 9,000 11,450 2790 4000 5750
A =, AL ~A2%e gto 3 ib 5
A ob, AT, Se
oT
FY 2015 FY 2020 FY 2025P FY 2015 FY 2020 FY 2025P
Branded » Unbranded Branded Unbranded
Source: Technopak Analysis
a-O-§
FY 2015 FY 2020 FY 2025P
m=Branded
FY 2015 FY 2020 FY 2025P
Branded » Unbranded
Exhibit 45: Penetration of Branded Products across Customer Segments in Indian Footwear Retail Market-
By Volume (Number of Pairs)
Casual Sports and Athleisure
452Cr 183Cr 201 Cr 20 Cr 29Cr 46 Cr
Bh 1% athe -8%
Ar AB
ra my
Fy 2015 FY 2020 FY 2025P FY 2015 FY 2020 FY 2025P
Branded
Unbranded Branded
Source: Technopak Analysis
Retail Channels
Formal Outdoor
23 Cr 26 Cr 29Cr 22 Cr 25 Cr 29Cr
2 ~2%0 390 -2
6 Hh 6
oy Dy =
FY 2015 FY 2020 FY 2025P FY 2015 FY 2020 FY 2025P
Branded © Unbranded = Branded Unbranded
Footwear retail market is amongst the most organized categories with a 30% penetration of the organised retailing.
The organised retail is largely characterised by the EBOs of the leading brands along with LFSs and other large
MBOs. E-commerce has rapidly gained foothold in the market and is now driving the growth of the organised
footwear retail. Growth in the organized format will also be driven by emergence of value brands and increasing
penetration of EBOs in Tier II, Tier III and below towns across the country.
However, the unorganised retail channels continue to be the cornerstones of the demand. Distribution led brands,
regional labels and unbranded products continue to depend on the deeply entrenched traditional multi-brand stores.
. EBOs are of players like Bata, Khadim, Sree Leathers, Relaxo, Liberty, Adidas, Reebok, Puma, Nike,
Campus etc.
. LFSs include department stores like Shoppers Stop, Lifestyle, Central, Pantaloons etc. and hypermarkets
such as Big Bazaar, Spencer’s etc.
. MBOs include retailers like Metro, Mochi, Regal, Inc. 5, Planet Sports etc. selling multiple brands which
include their own who sell their own private labels / brands as well as products of brands like Campus,
Skechers, Puma etc.
. Traditional includes typical Mom and Pop footwear stores.
Exhibit 46: Key Footwear Retail Channels
150
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Share in Share in CAGR
Channels Footwear Retail — | Footwear Retail- | (FY 2020-
FY 2020 FY 2025 2025)
pam [Exclusive brand outlet (EBO) 9% 11% a
, MBOs* and LFS* 5% 5%
Ofganlsed | Brand Website 5% 8%
Online Vfarkeiplaces 11% 14% 16%
Unorganised | B&M | MBO 70% 62% 6%
Source: Technopak Analysis
*MBO ~ Multi Brand Outlet, LFS ~ Large Format Stores
Since the omni channel and direct consumer connect is driving the expansion strategy of retail industry, several
footwear brands are now focusing on D2C expansion through EBOs (Exclusive Brand Outlets) and are launching
their own brand website. EBOs not only allows brands to directly connect with their customers, offer variety and
FY 2020 (INR 72,000 Cr) FY 2025 (INR 1,05,000 Cr)
Metro/Mini-metro
= Metro/Mini-metro . i
33% = Tier 1 30% = Tier 1
a Tier2 = Tier 2
= Tier 3 and Tier 4 = Tier 3 and Tier 4
Rural India Rural India
experience but also facilitates omnichannel retail.
Geographical Segmentation
Given the largely discretionary nature of the category, urban India accounts for 67% of the footwear market in
India by value. Top 8 cities (metro and mini metro cities) contribute to 40% of the urban footwear market and is
dominated by the presence of leading national and international brands. Tier II and below cities contribute
approximately 35% to the overall urban footwear market and it is expected to grow further with increasing
penetration of EBOs and online retail in these cities. Tier I, Tier II and below cities are poised for growth
thereby opening up new opportunities for retailers to expand.
Exhibit 47: Region wise distribution of Footwear Retail in India
Total Footwear Market (FY2020): INR 72,000'
67%
70%
= Rural Urban = Rural Urban
Source: Technopak Analysis
151
Total Footwear Market (FY2025): INR 1,05,000 Cr
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Exhibit 48: Region wise distribution of Footwear Retail in Urban India
FY2020 (INR 72,000 Cr) FY2025 (INR 1,05,000 Cr)
= Metro/Mini Metro
Tier 1
aTier 2
= Tier 3 and Tier 4
Rural India 18%
Source: Technopak Analysis
Exhibit 49: Region wise distribution of Footwear Retail in India
FY 2020 (INR 72,000 Cr)
Source: Technopak Analysis
Value Segmentation
Exhibit 50: Value Segmentation in the Indian Footwear Retail Market
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14% ~10% ~29% 20%
15% 16% ie
~35%
8% =e ~20%
FY 2015 FY 2020 FY 2021 FY 2025P
= Mass Economy sMid =Mid Premium Premium = Premium Plus
Source: Technopak Analysis
Mass (<® 500), Economy (@ 501 - & 1,000), Mid (@ 1,001 — 1,500), Mid Premium (1,501 - 2,000), Premium (2,001-3,000),
Premium Plus (2 3,000+)
The premium and premium plus segment is marked by international brands such as Aldo, Charles & Keith,
Kenneth Cole, Clarks, Adidas, Puma, Nike etc. that are currently focusing on Indian metro-centric centres. The
segment is signified primarily by the Exclusive Branded Outlet format.
The economy, mid and mid premium segment is marked by brands such as Campus, Khadim, Bata, Metro,
Woodland, Lotto with a share of 40%, adopt a mixed retail approach of EBOs, LFSs, e-commerce and distribution
led coverage.
Mass footwear brand retailers such as VKC, Lakhani Shoes, Relaxo, Ajanta Footwear, Lancer etc. that occupy
54% of the market, are characterized by a predominant distribution channel.
Most players have distinct positioning allowing them to capitalize on either retail or distribution business.
The retail-centricity of the sector implies a SKU offering in the range of 400-600 across dress, casual, outdoors
and sports. Hence key retailers necessarily play across a) both gender segments as well as b) usage segment for
completing the SKU range. International brands dwell on the international principals for design ideas and are
leveraging compliant and quality hubs across India for sourcing. Indian brands have increasingly focused on
offering relevant fashion at smart pricing, therefore the potential for design to act as a product differentiator.
GROWTH DRIVERS OF FOOTWEAR INDUSTRY
Growing niches and sub-segments for different occasions
The per capita consumption in terms of number of pairs of footwear owned has increased, especially in urban
areas, as consumers prefer several pairs of footwear to match different occasions and outfits. Casuals and flats are
preferred for daily wear as they are comfortable while travelling and commuting. Office goers opt for formal shoes
for work and casuals while commuting. Dress footwear, such as high heels and glittered footwear for women and
smart loafers or moccasins for men, are preferred for outdoor meets or parties. Sports and athleisure footwear is
required for active lifestyle. While many brands like Bata have a comprehensive offering for all usages, brands
like Adidas, Reebok, Puma, Nike and Campus are pivoted primarily around sports and athleisure.
Formal vs Casual and Open vs Closed footwear
Covid has changed consumer buying patterns across segments, from FMCG, personal care, apparel or footwear.
With consumers focus on health and fitness, the demand for sports and athleisure footwear has grown. Running
shoes also emerged as a top searched item under the sports footwear category. Additionally, running and walking
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continues to dominate the women casual and dress footwear with limited share in Men’s and kids category.
Open footwear primarily has lower realization as compared to closed footwear, which has a higher realization
Footwear evolved from utility product to fashion statement
Footwear has evolved from just being a necessity as cover and protection for the feet to an important part of the
fashion outfit. Along with clothing, footwear and accessories have become integral to put together a complete
look. This trend in turn is continuously driving growth in volume as well as the average selling price of the
footwear. Sneaker became style items and statements of identity style and youth culture that came together to
form the foundations of what we now understand as sneaker culture.
High growth in sports and athleisure footwear
. Health and Fitness: Increasing health and fitness awareness developing sports and outdoor infrastructure,
heightened influence of sports personalities and sports events is creating higher demand for sports and
athleisure footwear. This is the fastest growing segment as compared to other footwear segments.
Consumers are increasingly adopting an active lifestyle by participating and engaging in activities such as
running, trekking, home work-outs, working out in the gym, yoga and sports such as tennis, cricket,
badminton, basketball, and football. This had led to a rise in the demand for activity-specific sports
footwear. Sports as a habit is increasing across demographics of gender and age thereby broad basing the
target customer. COVID-19 has accelerated the demand in this segment.
. Casual Comfort: Consumers also increasingly prefer sports and athleisure footwear for long-distance
travelling and vacation. Doctors also advise its usage for daily wear for better foot coverage and support
for old-age group.
. Fashion: Sports footwear, now being used as a fashion element of an outfit as well, increases the target
audience manifold. Buoyed by the rampant comfortable and casual dressing culture, the sports look is now
being sported by celebrities and influencers not only during travelling and work outs but also for public
events and appearances. It has become a mainstream fashion category so much so that casual wear brands
across premium and luxury segments like Zara, H&M, Ralph Lauren have introduced product lines related
to sports and athleisure.
Women segment to rise with rise in women workforce
With an increase in the women workforce, the demand for women’s footwear has grown tremendously on account
of growth in household incomes and emergence of varied occasions. The share of women’s footwear has risen
from approximately 37% in FY 2015 to approximately 41% in FY 2020 and is projected to grow at 9%, surpassing
the growth of the overall category to account for approximately 44% of the total footwear market in FY 2025.
Women’s footwear segment entails more niches thereby necessitating to have more variety and styles as compared
with men’s footwear. In India, women tend to place greater emphasis on fashion than men and consequently
purchase footwear more frequently as compared to men.
High growth in kids’ segment
As household incomes have risen, expenditure on kids’ products have also witnessed a growth. Kids footwear is
expected to grow at a rate of 10% in the coming 5 years, well above the growth of the overall footwear market.
Premiumization
The average selling price in the Indian footwear industry has increased owing to premiumisation over the last
decade. The mass segment (under % 500) which constituted 56% of the total footwear retail market in FY 2015, is
expected to gradually decline to account for almost 51% of the total market by FY 2025 owing to a shift in
consumer preference towards high-priced products. The average selling price of a pair of footwear has grown at
approximately 5% CAGR from % 220 per pair in FY 2015 to = 275 per pair in FY 2020 and it is expected to be =
345 per pair by FY 2025. Brand consciousness, entry of international and home-grown brands and private labels,
rising income levels, and demand for quality footwear have led consumers shifting to higher price points.
Exhibit 51: Average Price per pair (%)
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449
344 332
274
237
219 192
151
122
77
FY 2015 FY 2020 FY 2025P
= Overall Men Women Kids
Source: Technopak Analysis
Owing to the rising middle class and the reverse migration post the pandemic, consumption in the Tier IT and III
cities is witnessing growth and this trend is expected to continue. Brands across categories including footwear are
intending to increase productivity and sales by improving the value mix in these cities. Exposure to a wide variety
of brands as a result of media and internet exposure, travel etc. has created a shift and consumers in smaller cities
also have started to view footwear as a lifestyle product.
E-commerce significant to the growth of organised retail
Since FY 2015, e-commerce in footwear has witnessed a high CAGR of 30% and it is expected to grow at a
CAGR of 16% in the coming 5 years. From a 6% market share in FY 2015 to a share of 16% in FY 2020, it is
expected to account for 22% of total footwear retail by FY 2025. Vertical and horizontal marketplaces like Myntra,
Ajio and Flipkart have become an alternative platform for both retail and distribution led brands. Along with this,
marketplaces have also provided access to markets for smaller labels and brands. Many digital first brands and
private labels like HRX have evolved through these platforms, thereby multiplying the throughput.
Multi-channel approach to address wider market segments
As players sets out to address the wider market segments, players are adopting a multi-channel approach to meet
that business objective. Almost 30% of the branded goods by value are sold through traditional retail. Relaxo
along with close to 400 EBOs, also leverages its deeply entrenched distribution network of approximately 50,000
retailers through 650 distributors. Bata, despite a well-entrenched network of approximately 1,560 EBOs is also
present across approximately 25,000 traditional retailers. Campus distribution network covers approx. 50 EBOs,
400 Distributors, and a very strong presence on e-commerce.
Branded play and organised retail propelled on the back of urbanisation
The share of the urban population has increased from 28% in FY 2000 to 35% in FY 2020 and is expected to
increase further to 50% by CY 2050. The rise in urbanization has facilitated, boosted and aggregated demand for
organised retailing and the sale of branded products in India. Increased urbanization has led to higher customer
density areas thus enabling retailers to use lesser number of stores to target a given number of customers.
Increase in brand consciousness
Exposure to global trends and fashions have increased overall brand consciousness among Indian consumers,
especially the younger generation in urban areas. Aspiration levels have also improved over time with an increase
in disposable incomes and appreciation of branded products across segments. Brand endorsements by celebrities
and eminent personalities in sports and cinema have led to an increase in brand awareness among the Indian youth.
In the current context, social media has played a critical role in facilitation of faster dissemination of information.
Entry of international brands in India
Brands such as Steven Madden, Adidas, Reebok, Puma, Hush Puppies, Crocs, Sketchers, Aldo, New Balance,
Charles and Keith, and Asics are present in the Indian footwear industry.
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The market skimming approach of the premium global brands present in India has left the Indian market largely
unaddressed. The ability of the home-grown brands like Campus and Relaxo to address demand across price
segments based on market knowledge, supply chain efficiencies, access to markets and price advantage presents
a large sized opportunity to them. Reviewing the product strategy and recalibrating the prices can help the value
players meet the demand at the right price. Homegrown brands are uniquely placed in the Indian footwear industry
considering their market knowledge, product offerings, mid to premium pricing and distribution mix with
significant D2C presence to benefit from the industry trends like increasing focus on fitness and health, brand
consciousness, rise of e-commerce, preference for homegrown brands and premiumization.
Product extensions available to footwear players
Brand positioning, retail network and market distribution ability is viewed as a competency that can be leveraged
for product extension opportunity. During FY 2019-20, Mirza International has increased its product lines by
launching new products under Red Tape brands like travel bags, undergarments etc. and also increased its product
mix in garment and shoes segments as well. Players like Adidas, Reebok, Nike, Puma, Asics, Skechers positioned
as sports and athleisure players have almost 40-50% of their total SKUs dedicated to categories other than
footwear such as apparel, accessories, sports gear and luggage. Players like Under Armour and HRX have an even
lesser share of footwear in their assortment. Wider portfolio with a cohesive assortment enables the players to
cross sell solutions. Additionally, the other categories due to the current small base are witnessing high growth.
Sports and athleisure apparel and gear are large and fast-growing categories. Estimated at = 7,500 crore, the sports
and athleisure apparel market is estimated to grow at a CAGR of 16% till FY 2025. The sports and athleisure gear
market currently at = 975 crore is estimated to grow to % 2,025 crore at a CAGR of 16%.
KEY SUCCESS FACTORS
Supply Chain Efficiencies: Agility and quick response have become a key imperative especially after COVID-
19 when efficient supply chains are characterized by shorter demand cycles, technology, and closer direct-to-
consumer relationships. While the south-east Asian countries have maintained their dominance in manufacturing
for most global brands due to the price advantage, many global brands have also turned to local-for-local sourcing.
Indian brands exercise a mixed approach of in-house manufacturing and outsourcing to local and foreign partners.
For example, Campus has in-house manufacturing for uppers (~10%) and soles (~35%), with outsourcing partners
being exclusive, and 100% in-house assembly, a critical aspect of the business which results in a low lead time.
Multi-channel Approach through a robust Retail Network and Distribution: Product availability across
channels and geographical catchments is of paramount importance. Therefore, all major brands engage retail and
distribution networks to access the markets. The financial pressures on physical stores have necessitated purpose-
driven retail footprint, with specific formats for different store types.
Sustained efforts in Product Development: Quality, design technical and aesthetic, relevant pricing inventory
turns are becoming lesser - The footwear industry, like other fashion-oriented industries, has a shorter design life
span and requires a large number of stock keeping units (“SKU”) in terms of varieties in colour, design, sizes, and
types. On account of this, key footwear players typically tend to introduce new designs frequently to stay relevant
and attract customers. Managing the supply chain to make it more responsive to frequent introductions of new
design is a key challenge for retailers. Campus has been launching over 700 styles per year.
SPORTS AND ATHLEISURE FOOTWEAR RETAIL MARKET
The sports and athleisure footwear retail market is estimated to be ~% 11,000 crore in FY20. It contributed a share
of ~15% in the overall footwear retail market. The market fell by 18% in FY21 as compared to FY 20 primarily
on account of the COVID-19 pandemic. Expected to grow at a CAGR of ~15% over FY20-25, well above the
footwear category average, it is likely to double itself in value and account for ~21% of overall footwear retail by
FY25. Amongst retail categories, sports and athleisure footwear has the highest branded penetration of ~54% in
FY20, which grew to 56% in FY21, and is expected to grow to 57% in FY22 and 60% in FY25.
This organized retailing largely signified by the premium segment of the sports and athleisure footwear market in
India has been dominated by the international brands such as Adidas, Nike, Adidas, Puma and Lotto. Most of
these brands entered the country in the 1990s and in the years that followed and established their presence through
local franchisees. However, the entry of new Indian brands along with international brands across value segments
and niches is propelling this segment to grow. Campus is one of the very few established Indian brands in a
segment which is primarily dominated by international brands.
156
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evidenced by the extremely low footwear penetration per capita as compared to developed economies, as well as
the low contribution of sports and athleisure footwear to overall footwear. These factors suggest a high growth
runway for the segment.
Exhibit 52: Contribution of Sports and Athleisure Footwear — FY2020
Footwear Sports and Athleisure Population | Per Capita Annual Expenditure
Retail Footwear Retail (USD | Share | “(inion on Sports and Athleisure
(USD bn) bn) Footwear (USD)
Global 340.0 103.8 31% 7.80 133
India 9.6 1S 15% 1.38 11
China 61.6 20.0 32% 1.43 13.9
USA 60.6 31.3 52% 0.33 94.8
Source: Secondary Research
Exhibit 53: Price Segments Split in the Sports and Athleisure Footwear Retail Market
INR 5,620 Cr INR 11,000 Cr INR 9,000 Cr INR 22,000 Cr
SS
19% a
12% 25%
17%
a 25%
oa
12%
13% 13%
FY 2015 FY 2020 FY 2021 FY 2025P
= Mass Economy s=Mid Mid Premum Premium = Premium Plus
Source: Technopak Analysis, Note: Mass (<® 500), Economy (@ 501 - & 1,000), Mid (@ 1,001 — 1,500), Mid Premium (1,501 -
2,000), Premium (2,001-3,000), Premium Plus (2 3,000+)
The contribution of men’s products in the organized sports and athleisure footwear is estimated to be higher than
that in the overall footwear category. While the women’s and kids’ market did not witness a rapid growth initially,
in the last few years, this market has registered a significantly increased demand.
Exhibit 54: Age Segmentation in Sports and Athleisure Footwear Retail Market
Sports & Athleisure Retail Market (FY2020): INR 11,000 Cr
12%|
30%
=<14 years 14-18 Years = 18-35 Years 35-50 Years 50+ Years
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Exhibit 55: Customer Segment Split in Branded Sports and Athleisure Footwear Retail Market
Sport INR 2,698 Cr INR 5,940 Cr INR 13,200 Cr
Athleisure -AT% ~AT%
= a
~A9% ~A9%
~A6%
SS
Ea
FY 2015 FY 2020 FY 2025P
= Men's Women's = Kids’
Source: Technopak Analysis
KEY PLAYERS IN SPORTS AND ATHLEISURE FOOTWEAR RETAIL MARKET IN INDIA
Indian sports and athleisure market has a number of international players like Adidas, Puma, Nike etc. Few Indian
brands like Liberty and Khadims have extended into the category with a small share of the revenue from the sports
and athleisure segment. Campus is the only homegrown sports and athleisure brand with almost 90% of its revenue
from the category. The top three players in the category in India include two international players and one domestic
player — Adidas, Puma and Campus. While Campus was one of the top 3 sports and athleisure footwear brands in
FY 2019 and FY 2020, it is the largest sports and athleisure footwear brand in India by value in Fiscal 2021.
Campus was also the fastest growing scaled sports and athleisure footwear brand in India over FY 2019 to FY
2021 (scaled brands being those with over = 200 crores of revenue in FY19).
Exhibit 56: Revenue of Key Sports and Athleisure Focused Players in India (% crore)
Key Total
Sports Revenue from CAGR | Footwear
Total Revenue
and) | Taian tneracons Footwear Segment | FY19-21 | Volume
Athleisure (Estimated)
Focussed FY | FY | FY | FY ] FY | FY | (Revenue) | FY ] FY
Brands 2019 | 2020 | 2021 | 2019 | 2020 | 2021 2020 | 2021
Campus Indian 590 732 710 590 732 710 10% 1.4 1.3
Puma* International 1153 1,412 | 1,271 600 734 650 A% 0.4 0.3
Adidas International 1221 1,198 914 599 756 517 -7% 0.5 0.3
Skechers** International 627 750 650 439 525 455 2% 0.2 0.2
Nike * International 814 760 NA 549 502 377 -17% 0.3 0.2
SparX Indian 770 840 670 340 380 270 -11% 0.7 0.6
Reebok International 400 429 310 311 334 263 -8% 0.3 0.2
Power International 440 458 256 440 458 256 -24% 0.8 0.5
Asics International 137 162 177 119 141 156 14% 0.1 0.1
Asian Indian 64 103 NA 64 103 NA NA 0.2 NA
Source: MCA Report, Annual Reports, Secondary and Primary Research
* Nike — FY 2021 MCA not available so revenue estimated. Estimates are arrived at basis reference from relevant data on
geographic performance for the year that has been published in respective regulatory filings of the internationally listed parent
companies.
Puma has its financial year ending as on Dec 31st; hence CY 2017 has been considered as FY 2018 and so on
**Skechers — FY2020 and FY2021 MCA available only for one entity out of 2 registered entities so total revenue estimated
*** Brand ‘Power’ from Bata
+“ Sparx from Relaxo has a number of footwear segments including large share (fabricated) slippers/ flip-flops and casual
footwear contributing almost approximately 50-60% to the brand revenue so only relevant segment has been considered for
turnover from footwear
158
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value in FY20, which increased to approximately 17% share in FY21. Campus is the largest sports and athleisure
footwear brand in India by volume, with a market share of 21-24% of the branded market in FY2020, which
increased to 25-28% in FY2021.
It is to be noted that for the purpose of computing market share by value at retail, a 20% mark-up has been applied
on reported revenues of the players to account for various channel margins. A similar 20% mark-up has also been
considered while arriving at the retail market size.
SECTION VI: COMPETITIVE LANDSCAPE
EVOLUTION OF SPORTS AND ATHLEISURE FOOTWEAR IN INDIA
Phase 1: Emergence of Indian Brands (1985-1994)
The decade 1985-1994 is the evolutionary phase of branded play and organized retailing in footwear retail market,
majorly focused on casual and formal footwear marked by the presence of a handful of brands such as Action,
Relaxo.
Phase 2: Advent of global athleisure Players and EBOs (1995-2004)
The next decade was signified by entry of global brands like Adidas, Nike, Reebok, Fila, Puma. Most of these
global brands happened to be sports and athleisure centric creating a branded premium sports and athleisure
segment within the footwear market. These brands developed their retail footprint by establishing a network of
EBOs as contrast to the distribution led approach of brands in the previous years. Engagement with athletes and
sports people for endorsements enabled to garner popularity and aspirational value.
Phase 3: Introduction of e-commerce and D2C Brands (2005-2014)
From 2005 onwards, the market became more dynamic with the entry of many more international luxury and
premium brands, homegrown brands in the value segment, expansion in footprints, large format multi-brand retail
formats and their private labelling and emergence of e-commerce. During this decade brands like Puma, Lotto,
HRX, Campus, Skecher, were launched in the Indian footwear market. E-commerce marketplaces, both horizontal
and vertical started emerging as sales platforms. However, the scale remained limited due to reservation in
adoption and logistics constraints such internet and device penetration, challenges in deliveries and payments.
Retailers also developed their transactional websites to enable digital sales. Some D2C brands like Decathlon,
Solethreads operating with a combination of stores and website and many digital first brands came into being.
Phase 4: Strengthening of Omnichannel Presence (2015-present)
Since 2015, e-commerce has continued to gain foothold. Share of e-commerce within overall footwear retail has
been steadily growing as is the revenue share for brands through e-commerce. Many international premium brands
like Onitsuka Tiger/Asics and Under Armour choose e-commerce partnerships with Myntra to enter and test
waters in India. HRX, a private label of Myntra launched in 2015 has been spun off as independent brand. Brands
expanding their business model to focus on direct connect with consumers through EBOs and online presence.
Exhibit 57: Evolution of Sports and Athleisure Footwear Landscape in India
159
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Phase 1; Emergence of Indian Phase 2: Advent of Global Phase 3: Introduction of e- Phase 4: Incorporation of om
based Brands | Aidileisure Players commerce and D2C brands channel presence
sein 1 Introduction of multiple Increasing penetrationofe- © Adoption of sales through e-
© i trenr heoetiey ie ill foreign brands in India commerce and D2C brands commerce led brands to
© Skewed towards sports and ©_-“Highly focused on sportswear due to availability of internet incorporate omnichannel
formal footwear |” Endorsements with athletes | 0 Entry of Indian and Foreign presence in Indian Footwear
© Limited Brand options | due to increasing penetration brands offering hybrid Andustry.
ofsatellite TV | products combining sports © Easy entry of foreign brands
| and athleisure having onmnichannel presence in
their home country
= ca
PIA & 6 AZZ By G/aSICS
action pum Eee ua oF
a 6! Reabok Pry% SB
Laticer Kx aM SS ed ~ campus BS.
1985-1994 ' 1995-2004 1 2005-2014 2015- Present
Sports and Athleisure Footwear Retail Market: Competition Mapping
Indian sports and athleisure footwear market is dominated by certain large national and international players like
Adidas, Asian Footwear, Asics, Bata, Campus, Decathlon, Fila, HRX, Khadim, Lancer, Liberty Shoes, Lotto,
Metro Shoes, Mirza International, New Balance, Nike, Onitsuka Tiger, Puma, Reebok, Skecher, Under Armour
etc.
The transformed lifestyle has been complemented with access to gyms and neighborhood parks, pushing an
increased number of people to take up activities like running and cross fit and has led to an increase in popularity
and traction in consumers across all socio-economic levels. Sports and athleisure footwear has seen penetration
of brands and private labels across a wide spectrum ranging from value to luxury.
(A) SKU Mapping
Product Type
While brands like Adidas, Reebok, Nike, Puma, Skechers, Asics, Under Armour, Campus, Lotto, Fila,
HRX, Lancer and Columbus are fulcrumed around sport and athleisure, brands like Bata, Khadim,
Liberty, Metro Shoes are leaning towards casual and formal footwear. Apart from the International
brands in the sports and athleisure footwear segment which offer a large number of SKUs, Campus is the
only Indian brand with a wide portfolio of sports and athleisure footwear in India as of FY 2021. Campus
offers one of the widest portfolios of footwear products among sports and athleisure footwear brands in
India in terms of SKUs as of September 30, 2021. Other Indian footwear brands have extended into the
sports and athleisure footwear segment with a limited product portfolio.
Exhibit 58: Key Players: Footwear SKU Offer across Usage Types
Brands Total ootwear Casual pees Formal | Outdoor oa
Adidas 7,673 0% 92% 0% 8% 0%
‘Asian Footwear 3,970 62% 38% 0% 0% 0%
Asics 1,486, 21% 60% 0% 19% 0%
Bata 5,176 69% 10% 17% 2% 2%
Campus 6,388 0% 100% 0% 0% 0%
Decathlon 292 0% 80% 0% | 20% 0%
Fila 1,000 0% 100% 0% 0% 0%
HRX 470 34% 62% 0% 4% 0%
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Brands Total Fooeeet | cael Sports aad Pormall ROuideon Deron!
SKUs Athleisure Uniform
Khadim 1,281 38% 12% 30% 17% 3%
Lancer 3,000 20% 70% 2% 4% 4%
Liberty Shoes 1,516 52% 19% 18% 9% 2%
Lotto 200 0% 100% 0% 0% 0%
Metro Shoes 1,419 63% 0% 20% 17% 0%
Mirza ,
International 1,364 15% 50% 30% 4% 1%
New Balance 3,049 30% 66% 0% 4% 0%
Nike 2,570 15% 76% 0% 9% 0%
Onitsuka Tiger 453 0% 100% 0% 0% 0%
Puma 7,234 28% 64% 0% 8% 0%
Reebok 1,644 6% 78% 0% 16% 0%
Relaxo 5,175 72% 18% 5% 0% 5%
Skechers. 1,117 10% 47% 4% 39% 0%
Under Armour 160 15% 80% 0% 5% 0%
‘Source: Secondary Research, Technopak Analysis; Considered Myntra for HRX and Under Armour, Amazon for Lancer and Fila; SKU listing
as of Sept 2021 from the company website
(B) Customer Segments
Men’s footwear currently dominates the sports and athleisure footwear retail market. Players like
Campus, Columbus, Lancer, Mirza International are men centric, whereas Asian and Metro Shoes are
women focused brands. Brands like Adidas, Reebok, Decathlon, Lotto, Nike, and Puma maintain an
equitable focus on men, women, and kids commensurate with the organised market forces.
Exhibit 59: Key Players: Footwear SKU Offer across Customer Segment Type
Brands Tata Men Women Kids
Footwear SKUs
Adidas 7,673 57% 23% 20%
Asian Footwear 3,970 22% 75% 3%
Asics 1,496 65% 29% 6%
Bata 5,176 44% 43% 13%
Campus 6,388 69% 9% 22%
Decathlon 292 43% 29% 28%
Fila 1,000 50% 50% 0%
HRX 470 54% 46% 0%
Khadim 1,281 35% 45% 20%
Lancer 3,000 90% 9% 1%
Liberty Shoes 1,516 54% 33% 13%
Lotto 200 53% 23% 24%
Metro Shoe 1,419 27% 63% 10%
Mirza International 1,364 82% 16% 2%
New Balance 3,049 52% 35% 13%
Nike 2,570 56% 25% 19%
Onitsuka Tiger 453 44% 47% 9%
Puma 7,234 44% 34% 22%
Reebok 1,644 57% 34% 9%
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Total .
Brands peer Men Women Kids
Relaxo 5,175 52% 35% 13%
Skechers 1,117 39% 48% 13%
Under Armour 160 51% 49% 0%
‘Source: Secondary Research, Technopak Analysis; Considered Myntra for HRX and Under Armour, Amazon for Lancer and Fila; SKU listing
as of sept 2021 from the company website
(C)
Price Segmentation
Branded penetration in the market has a skew towards mid to premium price points and there is limited
offering in the value and mid premium price points leading to pricing gaps in the market. These gaps in
the market have provided an opportunity for retailers to capture these segments. Brands like Bata,
Campus, Khadim, Liberty Shoes, Relaxo, Asian Footwear and Lancer are filling in this gap. Among key
sports and athleisure brands (more than 60% of their SKUs are sports and athleisure footwear segment),
the international brands are largely present in the semi premium and premium segment. Players like
Campus and HRX not only have a wide portfolio but are also present in 3 or more price segments.
Campus is one of the most relevant brands in sports and athleisure footwear in India, and covers over
85% of the addressable market as of Fiscal 2021, which is the highest amongst key sports and athleisure
footwear brands. Campus is also one of the only Indian brands in the premium category of the sports and
athleisure footwear industry in India as of Fiscal 2021.
Exhibit 60: Key Players: Footwear SKU Offer across Price Segments
Mid Premium
Total E Mid & Premi
2 Mass (<? ono, Mek Premium | %2,001-% | 9"
Brands Footwear en p= Bote nF eerenrare (eesonn) Plus &
501 — , 2
SKUs 1,000) 1,500) Bi} 3,000+)
‘Adidas 7,673 0% 1% 4% 4% 18% 73%
é estan 3,970 8% 77% 15% 0% 0% 0%
Asics 1,496 0% 0% 2% 2% 4% 92%
Bata 5,176 17% 31% 8% 12% 11% 21%
Campus 6,388 10% 45% 23% 18% 3% approximat
ely <1%
Decathlon 292 3% 13% 15% 18% 18% 32%
Fila 1,000 0% 0% 0% 0% 0% 100%
HRX 470 0% 0% 0% 0% 30% 70%
Khadim 1,281 37% 49% 8% 3% 2% <1%
Lancer 600 0% 65% 15% 20% 0% 0%
Liberty Shoes | 1,516 21% 38% 12% 12% 8% 9%
Lotto 200 0% 0% 0% 0% 0% 100%
Metro Shoes 1,419 0% 0% 0% 6% 9% 85%
‘nis ae a 1,364 0% 0% 0% 0% % 93%
New Balance | 3,049 0% 0% 0% 1% 1% 95%
Nike 2,570 0% 0% 0% 0% 6% 94%
— 453 0% 0% 0% 0% 0% 100%
Puma 7,234 0% 0% 0% 10% 30% 60%
Reebok 1,644 0% 1% 3% 4% 10% 82%
Relaxo 5,175 78% 16% 4% 2% 0% 0%
Skechers Ty 0% 0% 0% 0% 6% 94%
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Mid Premium
Total Economy | Mid ; Premium
Brands Footwear aa (@501-% | 1001-2 @iaiue iS aaa =) pus &
501 — , Z
SKUs 1,000) 1,500) ae 3,000+)
Under - ;
160 0% 0% 0% 0% 3% 97%
Armour
Source: Secondary Research, Technopak Analysis; Considered Myntra for HRX and Under Armour, Amazon for Lancer and Fila; SKU listing
as of sept 2021 from the company website
Sports and Athleisure Footwear
Exhibit 61: Key Players: Footwear SKU Offer across Price Segments (%)
Total Mid/ Semi- Premium
pe Footwear | Mass(<t | Economy | Premium | @1,501~ | @2,001- | “pine
Skule 500) e501-z | @1,001- | 2,000) | 3,000) | 5 roo.
1,000) = 1,500)
Adidas 7,059 0% 1% 4% 4% 18% 73%
‘Asian Footwear | 1,509 0% 87% 14% 0% 0% 0%
‘Asics 898 0% 0% 0% 0% 3% 97%
Bata 518 0% 63% 14% 13% 0% 10%
Campus 6,388 10% 45% 23% 18% 3% appraxiniat
ely <1%
Decathlon 234 3% 13% 15% 18% 18% 32%
Fila 1,000 0% 0% 0% 0% 0% 100%
HRX 291 0% 0% 0% 0% 30% 70%
Khadim 154 10% 78% 12% 0% 0% 0%
Lancer 2,100 0% 73% 11% 16% 0% 0%
Liberty Shoes 288 0% 51% 14% 17% 12% 6%
Lotto 200 0% 0% 0% 0% 0% 100%
Metro Shoes 0 0% 0% 0% 6% 0% 0%
Mirza _
: 682 0% 0% 0% 0% 11% 89%
International
New Balance 2012 0% 0% 0% 0% 5% 95%
Nike 1,953 0% 0% 0% 0% 9% 91%
Onitsuka Tiger 453 0% 0% 0% 0% 0% 100%
Puma 4,630 0% 0% 0% 9% 14% 77%
Reebok 1,282 0% 0% 0% 5% 7% 88%
Relaxo 932 9% 74% 10% 7% 0% 0%
Skechers 525 0% 0% 0% 0% 3% 97%
Under Armour 128 0% 0% 0% 0% 2% 98%
Source: Secondary Research, Technopak Analysis; Considered Myntra for HRX and Under Armour, Amazon for Lancer and
Fila; SKU listing as of sept 2021 from the company website
Retail Channels
Retail led Brand: Brands which largely depend on their own network of EBOs or their own website sales such
as Adidas, Bata, Decathlon, Nike, Puma.
Distribution led Brands: Brands which largely depend on intermediaries such as distributors and wholesalers to
gain market access such as Campus, Relaxo, Columbus, Lancer.
Many mid to premium brands adopt a hybrid approach for maximum market coverage. Markets wherein stores
may not be commercially viable are accessed through distributors and their retail network. Presence across
distribution channels also hedges business risks.
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Exhibit 62: Presence across Retail Channels
Modern Retail
Brands owen Traditional Retail
EBOs LFSs/MBOs Online
Adidas v v
Asian Footwear Vv
Asics
Bata
‘Campus
KIS] ATS
q
Decathlon
Fila
HRX
Khadim
qj
qj
Lancer
KI] <
Liberty Shoes
Lotto
qj
Metro Shoes
<j
Mirza International
New Balance
Nike
Onitsuka Tiger
Puma
Reebok
Relaxo
KIA ST STS] SIESTA SI SES
Skechers
Under Armour v
KTS] SIESTA SISSIES SPST SY SESS SY SESS SS] ES
AISI} SSS} <1 S16) 616464 646
Source: Secondary sources, Technopak Analysis.
Average Selling Price
Among the key players of footwear retail market, international sports and athleisure footwear brands like Adidas,
Fila, New Balance, Nike, Onitsuka Tiger, Puma, Reebok, Skechers, Under Armour have average selling price
(ASP) in the range of % 2,000-4,000. While Indian brands like Columbus, Liberty Shoes, Lancer, Metro Shoes,
HRX, Khadim, Relaxo, etc. have an average selling price in the range of % 500-1,400.
Exhibit 63: Average Selling Price
Brands ASP in®
‘Adidas ~1,800-2,400
Asian Footwear ~ 600-800
Asics ~ 1,900-2,300
Bata ~ 900
Campus ~ 600-700
Decathlon ~ 800-1,100
Fila ~ 2,800-3,200
HRX ~ 1,200-1,500
Khadim ~ 1,000-1,300
Lancer ~ 700-900
Liberty Shoes ~ 500-700
Lotto ~ 3,000-3,300
Metro Shoes ~ 1,200-1,400
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Brands ASP in
Mirza International ~ 3,300-3,600
New Balance ~ 3,200-3,600
Nike ~ 2,900-3,200
Onitsuka Tiger ~ 3,400-3,800
Puma ~ 2,800-3,400
Reebok ~ 3,000-3,300
Relaxo ~ 150-250
Skechers ~ 3,600-4,000
Under Armour ~ 4,000-4,500
Source: Annual Reports, Secondary Research, Technopak Analysis; Store Locators; Company Websites; General Discounts
are on online sales only; NA — Not Available; Data for Campus is provided
Manufacturing and Assembly Policy
India is amongst the top manufacturers for global brands such as Nike, Puma and Adidas, with over 80% of their
products being outsources and manufactured in Asia-Pacific Countries (APAC) region. Given the small scale,
D2C brands like HRX, are outsourcing to countries like China, wherein quality and design standards are met in a
cost-efficient way. Footwear brands such as Bata, Liberty and Mirza International follow a mix of in-house
manufacturing and outsourcing (mix of Indian and foreign vendors). Established brands such as Metro Shoes and
Khadim also prefer to outsource their manufacturing and maintaining an asset-light model. Due to high
requirement of outsourcing, footwear manufacturing specialists have emerged within India such as SSIPL, which
have developed capabilities to be the exclusive manufacturers for brands such as Puma, Lotto for the Indian
market. They also work with other reputed international brands such as Asics, Converse, and Power with an
average output of 2.4 million shoes per annum. The industry average for manufacturing lead time is 90 to 120
days.
Exhibit 64: Manufacturing/Outsourcing Approach of Key Players of footwear Industry
Brands Manufacturing/Outsourcing Approach
-Almost 100% outsourced
Adidas
-25 manufacturing partners globally in footwear
Nik - 85% of Nike’s footwear is delivered on lean manufacturing lines
ike
-96% manufacturers are in Vietnam, China, Indonesia, and Thailand
-96% production from APAC countries with Vietnam producing 35% of all Puma
products
-4 manufacturing plants strategically located PAN India
Puma
-Largest factory in Batanagar started in 1931
Bata
- approximately 50% manufacturing in-house, 50% outsourced
- Annual production capacity 21 million pairs
- In-house manufacturing for uppers (approximately 10%) and soles (approximately
35%)
- 100% in-house assembly
Campus
- approximately 90% outsourcing for uppers and approximately 65% for soles
HRX - Manufactured in various parts of China and Vietnam
. -6 manufacturing plants located PAN India
Liberty Shoes
-Produces approximately 50,000 pairs per day
- 2 manufacturing plants in Kolkata and Kanpur
Khadim - Follow an asset light model
- 2 exclusive outsourced manufacturing facilities
- approximately 90% of all products” sold are outsourced
Metro Shoes - 100% third party outsourced products
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Brands Manufacturing/Outsourcing Approach
- Maintain an Asset light model
- 6 integrated manufacturing facilities PAN India
- 6.4 million pairs produced per annum
Mirza International _| - approximately 55% of all products” are manufactured in-house
- Outsource production of footwear to China who exclusively manufacture for Mirza
International
Source: Annual Reports, Secondary Research, Technopak Analysis
Note*: All products include Footwear, apparels, and accessories
Raw Material Procurement Policy
Production of footwear requires raw materials such as leather, rexine (registered trademark of an artificial leather
like fabric), inter-lining, PVC sole, rubber, net, cotton, etc. China and other Asia Pacific countries are the largest
exporters of raw materials required for producing footwear.
Adidas’ global business operation division categorises suppliers into five categories -strategic suppliers,
subcontractors, material and service providers, licensees and agents. Adidas currently has over 35 strategic
suppliers for footwear, 60+ suppliers for apparel and 15+ suppliers for hardware. Approximately 80% of these
strategic suppliers are based in APAC region. In India, Adidas sources approximately 30% of their raw materials
from small and medium enterprises. Nike India and HRX procures 100% of its raw material from other countries,
mainly China and Vietnam. Liberty Shoes is looking to align its supply chain with ‘Vocal for Local’ strategy
started by Government of India and aims to prioritise local markets for its raw material requirement. Metro Shoes
procures approximately 58% of their raw materials from domestic sources and 42% of raw material from
international country and international third-party agents. Campus has more than 85% raw material sourcing from
domestic market, which provides it with significant supply chain efficiencies, while maintaining quality standards
through 100% in-house assembly.
Financial Metrics
Revenue
Revenue registered in FY 2018 and FY 2020 indicate that most players have been able to register growth. Players
like Decathlon, Campus, Puma have witnessed high growth, driven by their increasing appeal to consumers, strong
marketing and presence in the high growth segment of sports and athleisure.
Exhibit 65: Revenue (in % crore) for Private and Public Listed Players
Revenue
ah CAGR Growth
FY 2018 FY 2019 FY 2020 FY 2021 2018-20 2020-21
Adidas 1114 1221 1198 914 4% -24%
Asian Footwear 47 64 103 NA 48% NA
Asics 93: 137 162 176 32% 9%
Bata 2641 2931 3056 1708 8% -44%
Campus 510 595 732 711 20% -3%
Decathlon 1277 1775 2208 NA 32% NA
Khadim 749 799 772 626 2% -19%
Lancer 78 103 a5 NA 13% NA
Liberty Shoes 544 602 652 458 9% -30%
Metro Shoes 1043 1217 1285 800 11% -38%
Mirza International 972 1152 1260 1049 14% -17%
Nike 815 814 760 NA -3% NA
Puma 1031 1153 1412 1215 17% -14%
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Revenue
CAGR Growth
Brands
FY 2018 FY 2019 FY 2020 FY 2021 2018-20 2020-21
Reebok 388 400 429 316 5% -26%
Relaxo 1949 2292 2410 2359 11% -2%
Under Armour NA NA 44 NA NA NA
Skechers 345 507 659 S77 38% -12%
Source: Annual Reports from respective company websites or MCA, Secondary Research, Technopak Analysis, Revenue for
standalone businesses ss MCA reports
FY 2021 data is not available for some players; NA-Not Available, Puma has its financial year ending as on Dec 31°; hence
CY 2017 has been considered as FY 2018 and so on
The overall footwear retail market in India witnessed de-growth in FY 2021 owing to the impact of COVID 19.
While key public listed players like Bata, Metro Shoes and Liberty Shoes witnessed a de-growth of 30-45%,
Relaxo (value segment) and Campus (sports and athleisure footwear) witnessed only marginal de-growth of 2-
3%, showcasing inelasticity of demand for their products. International players like Adidas and Reebok also
witnessed a 24-26% degrowth in FY 2021.
Margins
Gross Margins - Gross margin is the money a company retains after incurring the direct costs associated with
producing the goods it sells and the services it provides.
EBIDTA Margins - EBITDA margin is a measure of a company's operating profitability. EBITDA margins for
certain players have increased from FY19 due to a change in the accounting methodology (adoption of IND-AS
116), which impacts retail focused players who follow a lease model.
PAT Margin - PAT margin is the percentage of revenue remaining after all operating expenses, interest and taxes
have been deducted from a company's total revenue.
Exhibit 66: Margin Profiles
Gross Margin EBITDA Margin PAT Margin
Brands FY | FY | FY | FY | FY | FY | FY J] FY | FY | FY | FY | FY
2018 | 2019 | 2020 | 2021 | 2018 | 2019 | 2020 | 2021 | 2018 | 2019 | 2020 | 2021
Adidas 47% 47% 47% 41% 19% 21% 21% 10% 12% 14% 13% 5%
Asian Footwear 36% 35% 33% NA 13% 11% 8% NA 3% 3% 3% NA
Asics 35% 38% 38% 34% 14% 7™% A% 8% 9% 3% 1% 5%
Bata 54% 56% 58% 51% 14% 17% 28% 10% 8% 11% 11% 5%
Campus 43% 46% 48% 47% 16% 16% 19% 16% 6% 7% 8% A%
Decathlon 41% 39% 34% NA -3% 1% 6% NA 0% 1% -3% NA
Khadim 43% 38% 36% 29% 10% ™M% 4% 1% % 3% 4% 5%
Lancer 35% 35% 35% NA 8% 9% 10% NA 3% 3% 3% NA
Liberty Shoes 47% 48% 48% 52% 7% 7™% 9% 11% 1% 1% 1% 0%
Metro Shoes 56% 55% 56% 55% 21% 28% 27% 21% 13% 12% 12% 7%
Mirza International | 51% 43% 44% 44% 18% 12% 14% 11% 8% 4% 4% 1%
Nike 44% 47% 44% NA 3% 10% 8% NA -~6% 1% 4% NA
Puma 41% 43% 45% 47% 3% 2% 3% -3% 1% 0% -1% -1%
Reebok 40% 43% 44% 33% 11% 11% 17% 3% 9% 9% 16% 1%
Relaxo 55% 52% 57% 56% 16% 14% 17% 21% 8% 8% 9% 12%
Under Armour NA NA 42% NA NA NA -19% NA NA NA -20% NA
Skechers 43% 45% 40% 39% 19% 24% 17% 11% 11% 15% 9% 3%
Source: Annual Reports from respective company websites or MCA, Secondary Research, Technopak Analysis,
167
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EBITDA/Revenue from operations; PAT Margin = PAT/Total income; Puma has its financial year ending as on Dec 31‘; hence CY 2017 has
been considered as FY 2018 and so on
Key Financial Ratios
Return on Capital Employed
ROCE (Return on capital employed) indicates the company’s efficiency because it measures the company’s
profitability after factoring in the capital that has been used to achieve that profitability. Players like Bata,
Decathlon, Puma, Relaxo, have revenue 2-4 times what Campus had in FY 2020, but the ROCE metrics indicate
that Campus is more efficiently generating profit from its capital. ROCE is a better gauge for the performance or
profitability of the company over long periods. Campus had amongst the highest return on capital employed
footwear brands in India in over the last four financial years. ROCE for Campus for the nine months of Fiscal
2022 (April 2021 to December 2021) was 25.06%.
Exhibit 67: Return on capital employed
ROCE
Brands
FY 2018 FY 2019 FY 2020 FY 2021
Adidas 31% 30% 21% 7%
Asian Footwear 19% 17% 22% NA
Asics 22% 13% 5% 10%
Bata 22% 26% 21% -0.5%
Campus 40% 38% 30% 21%
Decathlon -10% -2% -1% NA
Khadim 25% 15% -1% ~6%
Lancer 18% 22% 20% NA
Liberty Shoes 9% 14% 9% 6%
Metro Shoes 36% 26% 20% 10%
Mirza International 17% 12% 13% 6%
Nike -39% -115% 15% NA
Puma 21% 13% 16% -22%
Reebok 21% 20% 25% 2%
Relaxo 28% 24% 22% 24%
Under Armour NA NA -18% NA
Skechers 60% 61% 26% 9%
Source: Annual Reports from respective company websites or MCA, Secondary Research, Technopak Analysis, FY 2021 data
is not available for some players; NA-Not Available; ROCE = EBIT/ (Total Assets — Current Liabilities); Puma has its
financial year ending as on December 31, hence CY17 has been considered as FY18 and so on.
Exhibit 68: Comparison with Key Listed Players
ROCE
Brands
FY 2019 FY 2020 FY 2021
Bata 26.09% 20.64% -0.50%
Campus 38.38% 30.07% 20.72%
Relaxo 23.93% 21.61% 23.64%
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Some of the information in the following section, especially information with respect to our plans and strategies,
contain certain forward-looking statements that involve risks and uncertainties. You should read the section
“Forward-looking Statements” on page 20 for a discussion of the risks and uncertainties related to those
statements and the section “Risk Factors” on page 32 for a discussion of certain risks that may affect our business,
financial condition or results of operations. Our actual results may differ materially from those expressed in, or
implied by, these forward-looking statements.
The industry-related information contained in this section is derived from the industry report titled “Report on
Footwear Retail in India” dated April 7, 2022, prepared by Technopak (the “Technopak Report”). We
commissioned and paid for the Technopak Report for the purposes of confirming our understanding of the industry
specifically for the purpose of the Offer, as no report is publicly available which provides a comprehensive
industry analysis, particularly for our Company's products, that may be similar to the Technopak Report.
We have included certain non-GAAP financial measures and other performance indicators relating to our
financial performance and business in this Prospectus, each of which are supplemental measures of our
performance and liquidity and are not required by, or presented in accordance with Ind AS, Indian GAAP, IFRS
or U.S. GAAP. Such measures and indicators are not defined under Ind AS, IFRS or U.S. GAAP, and therefore,
should not be viewed as substitutes for performance, liquidity or profitability measures under Ind AS, IFRS or
U.S. GAAP. In addition, such measures and indicators, are not standardized terms, hence a direct comparison of
these measures and indicators between companies may not be possible. Other companies may calculate these
measures and indicators differently from us, limiting their usefulness as a comparative measure. Although such
measures and indicators are not a measure of performance calculated in accordance with applicable accounting
standards, our Company’s management believes that they are useful to an investor in evaluating us as they are
widely used measures to evaluate a company’s operating performance.
Our financial year-ends on March 31 of each year, so all references to a particular FY, Fiscal or Fiscal Year,
Financial or Financial Year are to the 12 months ended March 31 of that year.
Campus
We are the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021.
(Source: Technopak Report). We introduced our brand ‘CAMPUS’ in 2005 and are a lifestyle-oriented sports and
athleisure footwear company that offers a diverse product portfolio for the entire family. We offer multiple choices
across styles, color palettes, price points and an attractive product value proposition.
Overview
Our strength in the Indian sports and athleisure footwear landscape is demonstrated on account of the following
(Source: Technopak Report):
“We are the largest sports and athleisure footwear brand in India, both in terms of value and volume in Fiscal
2021.
“We are the fastest growing scaled sports and athleisure footwear brand (scaled brands being brands with
over % 2 billion of revenue in Fiscal 2019) in India over Fiscal 2019 to Fiscal 2021.
“We had an approximately 15% market share in the branded sports and athleisure footwear industry in India
by value for Fiscal 2020, which increased to approximately 17% in Fiscal 2021. For details in relation to
branded footwear, see “Industry Overview” on page 125.
“We are one of the very few established Indian brands in a segment which is primarily dominated by
international brands.
“We are one of the most relevant brands in this segment, covering more than 85% of the total addressable
market for sports and athleisure footwear in India as of Fiscal 2021.
Our vision and mission statements are:
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Our Mission: To emerge as the most preferred sports and athleisure brand in India while becoming an integral
part of daily active lifestyle of every Indian.
Our market
The Indian footwear retail market is expected to grow at a CAGR of 8% from Fiscal 2020 to Fiscal 2025, and
21.6% from Fiscal 2021 to Fiscal 2025, being one of the fastest growing discretionary categories from Fiscal 2021
to Fiscal 2025. (Source: Technopak Report) Our specific industry segment of sports and athleisure footwear is
highly under penetrated, as evidenced by the extremely low footwear penetration per capita as compared to
developed economies and is expected to be the fastest growing segment, with a CAGR of 14% between Fiscals.
2020 and 2025, and 25% between Fiscals 2021 and 2025. (Source: Technopak Report)
Our target segment is growing due to a combination of factors such as the transition from the unorganized to
organized sector driven by enhanced preference for branded and quality footwear, increasing health awareness,
rising levels of disposable income in India, favorable trends in Indian demographics such as increasing population
of young adults and the growing demand for women’s footwear.
We cover more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal
2021, which is the largest market coverage amongst key sports and athleisure footwear brands. (Source:
Technopak Report)
The chart below demonstrates our market coverage across the total addressable market for sports and athleisure
footwear in India:
Market (FY21)
INR 90 billion
% below represents composition of S&A footwear market across
Entry, Semi-Premium, Premium and Premium Plus segments neni sore
.
(Above INR 3,000) 9) Ep 1
13%
Nike Puma Adidas
(INR Ha 000) Nike Puma Adidas
24% es
Entry to gments i caney
comprise = oy SA (ae j} Reebok — Liberty
16% Semi-Premium 1 Campus \ adidas Bata Liberty
__ (INR 1,001 — 1,500)
eI Ge =<
(<INR 1,001) “
( Campus
48% Sy asia E
Relaxo Bata Liberty
(Numbers mentioned below Campus logo in every segment represents number of SKUs offered in that segment)
Source: Technopak industry Report (as of September 30, 2021)
Source: Technopak Industry Report (as of September 30, 2021)
Notes: S&A refers to sports and athleisure. INR refers to Indian Rupees. Percentage total appearing as 101% due to rounding-
off: Key brands highlighted across segments for illustration purposes only
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Campus’ Value Proposition
We put the consumer first
In our experience, Campus’ target consumers have transformed dramatically over the years in how they perceive
and consume fashion, as digital and social technologies have in-turn transformed the way they shop, spot trends,
and share ideas and passions. Today, typical Campus consumers are not only browsing collections and shopping
from brick-and-mortar stores but are just as likely to browse and shop from their cell phones, with access to the
looks and recommendations of products around the world. Our target consumers are open to trying new styles and
look to purchase trending styles as soon as possible. In our view, Campus’ target consumer increasingly desires
to have access to latest global fashion trends and styles in real-time. Some of these trends have relatively shorter
shelf life, which in turn generates a potential risk of launching the wrong product in the market or missing a trend
completely.
Our business model places the consumer first. We analyze, design, develop and deliver our products keeping the
consumer at the forefront. We have managed to achieve the same by harnessing consumer and channel insights
via digitization of our sales process, resulting in better demand forecasting and faster time to market. Our core
target market is the 14 to 35 age group, which represented 44% of the sports and athleisure footwear market in
India as of Fiscal 2020. (Source: Technopak Report)
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in the market or missing a trend completely. In addition, we manage a relatively shorter time to market by
following a nimble and agile product development cycle, underpinned by a data centric approach. Our data centric
approach involves the collection and analysis of multiple data points from our digitized sales and distribution
network. This allows us to understand consumer demand trends, design preferences, color preferences, response
to new designs and price movements across product categories on an ongoing basis. We continuously evaluate
this data to forecast future consumption patterns in our target consumer segment, tailor our offering and plan our
production accordingly while catering to a wider base. The digitization of our sales process has emerged as a
critical enabler of faster speed to market for our products, better merchandising, and greater efficiency in design,
manufacturing and sales, generating a virtuous flywheel effect, as demonstrated below:
2 e
Investment in
D2C & Tech
23y Improved
O wt “=”
management
C2
a=
Reduced time
‘to market
We are fashion forward
Our consumer first approach and capability to harness consumer insights through the digitization of our sales.
process enable us to introduce agility in the product flow.
We have a design team that comprises our in-house team in India as well as a design consultancy arrangement in
China. Our design team tracks global fashion trends and curates products in line with the latest trends and styles
in the international market with customizations for Indian consumers. Our in-house team comprises 48 designers
based out of India, as on December 31, 2021.
We have adopted a fashion forward approach to new product launches to ensure that we have a faster design
conceptualization to product commercialization cycle. We are typically able to launch our products within 120 to
180 days from the date of product conceptualization.
Asa vertically integrated player, we have a distinct advantage in product creation / design and development while
striking a balance between product quality and time to market. We follow a nimble, fashion forward and
segmented approach to curate our product lines. We have several product development tracks with distinct times
to market serving various demand cycles:
> Flagship collection launch process (spring-summer and autumn-winter): this caters to our staple
business which forms the core of our fashion forward process. A majority of our annual designs are
conceptualized and commercialized under these two flagship seasonal launches. We launch two collections
each year, namely, (i) spring-summer by February/March; and (ii) autumn-winter by August/September.
> In-season replenishment: this allows us to capture any demand upside and cater to positive sales of certain
high velocity styles through a swift additional production of high-selling pieces in the collection at any time.
> Design fast track: this involves the quick design, development, and production of new products outside the
normal go-to-market process. We curate and launch innovative concepts such as special drops, exclusive
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and Campus Crazies as annual flagship design launches to coincide with the Indian festive period during the
October to December quarter. These are a part of our special drops and limited-edition product design
initiatives.
> Never Out Of Stock (NOOS): this refers to core replenishment products in our portfolio, focused on
creating the base of our product range over a longer period. It involves identification and manufacturing of
standard products which are always in demand across all seasons. We ensure that these models are always
available in stock and continuously replenished as a permanent element of our product portfolio.
This nimble and fashion forward approach in product development is reflected by means of our new launches and
expansive product portfolio. We launched 583 new designs in Fiscal 2021. Our product portfolio is extensive with
1,433 active styles for men, 241 active styles for women and 485 active styles for kids and children as on
December 31, 2021. We offer one of the widest portfolios of footwear products among sports and athleisure
footwear brands in India in terms of SKUs as of September 30, 2021. (Source: Technopak Report)
Our market coverage
We are the largest sports and athleisure footwear brand in India, both in terms of value and volume in Fiscal 2021.
(Source: Technopak Report) We have an expansive pan-India reach that enabled us to sell 12.26 million, 14.36
million, 13.00 million, 8.16 million and 13.65 million pairs in Fiscals 2019, 2020, 2021 and nine months ended
December 31, 2020 and December 31, 2021, respectively. We cater to consumer needs across different
demographics and price ranges. We cover more than 85% of the total addressable market for sports and athleisure
footwear in India as of Fiscal 2021, which is the largest market coverage amongst key sports and athleisure
footwear brands. (Source: Technopak Report)
¢ — Trade distribution: We have a pan-India trade distribution network which provides us with high channel
partner stickiness and is difficult to replicate, thus providing us with a significant advantage. Our distribution
coverage has been organized and set up based on the prime tenets of reach, engagement and financing, as
follows:
o Reach - We have over 425 distributors directly servicing and fulfilling orders of over 19,200
geographically mapped retailers at a pan-India level as on December 31, 2021. Of these approximately
19,200 retailers, our internal sales force of 152 employees has direct field coverage of approximately
11,300 retailers as on December 31, 2021. The remaining approximately 7,900 retailers are covered
through our distributor ‘feet on street’ initiative, which further depends on our distributor management
system, sales force activation application and retailers’ engagement application to streamline our
engagement with them. We have optimized our sales force through implementation of our field force
management system (a field force automation solution). This has helped us manage beat planning,
provide us with complete visibility of sales staff activities, new retailers acquisition, order capturing at
source and effective distribution management. This system employs GPS technology for monitoring and
sales network coverage. Our reach across India has increased with expansion of our distributor and
retailer network as well as increasing number of our sales force, in the last three Fiscals and the nine
months ended December 31, 2021.
tee etireee ial
— |
Distributor Management System salesforce activation App
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initiatives. Our sales teams actively engage with our distributors and retailers through direct contacts
under our ‘feet on street’ initiative. We undertake feedback collection at order taking regarding service
level to address any concerns faced by distributors and retailers and have a dedicated call center for this
purpose. We ensure direct payments of loyalty benefits and also provide branding solutions for all
retailers as well as customized branding and marketing for our top 1,000 retailers. We further provide
free health insurance coverage to our distributors and retailers and have introduced an innovative
scheme, namely, Sobhagya Lakshmi Yojna, to incentivize retailers through which we purchase
electronic gold bonds and credit these to retailer accounts linked to their wife or daughter. We have
engaged third party asset management companies to open these folios for our retailers’ families and
manage these accounts. As on December 31, 2021, over 7,000 retailers have registered for this gold
bond incentive, of which approximately 2,100 have become eligible and have received the gold bonds.
These engagement efforts incentivize our distributors and retailers to engage with our brand, market and
sell our products and maintain long-term associations with us.
o Financing — We have also rolled out financing options for our distributors by assisting them in obtaining
financing through select banks as channel partners. Our distributors are able to sign up for channel
financing with these banks with no recourse to us. Under these arrangements, we limit our direct
exposure to the distributors and receive payments from the banks while the distributors receive working
capital financing from the banks. As of December 31, 2021, 51 distributors representing 18.05% of our
sale of goods in Fiscal 2021 have signed up for channel financing. We are in the process of moving the
remaining distributors to adopt channel financing as a default. We actively monitor the credit terms of
our distribution network. These efforts combined with the channel financing have resulted in our
receivables days being reduced from 110 days in Fiscal 2019 to 41 days in the nine months ended
December 31, 2021.
For further details on our trade distribution network and engagement efforts, please see “ — Our Business and
Operations — Distribution”.
Trade Distribution: Pan-India Network with High Stickiness
iti i i CAMPUS
425+ 28 664 Multi-tier Engagement with Retailers | Unsecured Channel
distributors states cities & Distributors credit Geshe
rom to
* Sales Officer's retailer interaction during
‘pect on Street’ beat plan'coverage Unsecured Channel Financing facility
¢.11,300 extended to Distributors
—Peovered by 152 * Daily order taking & service level
19,200 feedback CAMPUS,
” internal sales team eS a
Geo-tagged__| * Direct scheme reward Dissemination
} Recourse Coote
retail touch 7,900 using QR Code scanning jaan ag
points > Distributor "Branding solutions for all retailers;
Feet on Street alliance customized visual merchandizing for more
than 1,000 leading retailers 51 distributors under ambit of channel
* Dedicated Call Center for channel partner financing
Optimum Sales Force Activation
"Customized beat plan mapping i penile sa Daily
+ Monitoring and network coverage Innovative hesaller Schemes monitoring of Racelable
via GPS technology unsecured pe
credit extension
Health Wealth \ 10
. z + ) at
Ramped up Coverage Free health Sobhagya Lakshmi
Be - Br insurance coverage Yojna — E-Gold bonds Coane:
a credited in account of n
Distributor Retaller_ Sales force qualifying retailer's pal
Expansion _ Expansion hiring wife / daughter neve Mar 19 Dec 21
Note: Data as of December 31, 2021;
(1) Receivable Days at an aggregate company level - calculated as trade receivables divided by average daily net sales during the relevant period
Direct to Consumer: We have an extensive online sales presence through third party pure play marketplaces, third-
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among others as well as our own e-commerce website. We have sold more than 7.00 million pairs through online
channels since Fiscal 2019 up to December 31, 2021.
In addition, we offer certain incentives to our franchisees if specified conditions linked to performance under the
contractual arrangements are met. In addition, our franchisees can avail cash discount by releasing payments
against invoices.
Our ‘omnichannel experience’
Our ‘omnichannel experience’ involves a confluence of multiple retail channels covering physical locations and
online channels to provide consumers a seamless experience. Our consumers are able to visit any channel to
experience our brand and products, make selections and comparisons, and purchase the product through their most
preferred channel. The integration of our physical and online channels is integral to our ability to remain connected
with consumers through all touchpoints in the consumers’ journey.
Our ‘omnichannel experience’ is designed to cover the consumer journey across multiple touchpoints as
demonstrated in the following manner:
Direct and Multi Layered Consumer Engagement
rey
Evaluation
Hons As 8&8 OBA
‘Awareness/
Pend
Touchpoints
ee Yoeoid
preg nd eumae 2% tem aumoahee/ nator wee
> brand/redit online > win B sie pany marltplace sei etek
<< PINT Pn oe =] LS Sone 7 e)
csc: OES TT] (3) a &
: > Marketing Brand/ Product Customer callsto User credentials CAM touchpoint GRcode-based
i 2 eerie AS: discovery via TY, ‘enquire product registration / Account Order confirmation, authenticity check
:
‘Bago
availability
S
fe @©&%
( + Physical Stores Enquiry pertaining 3, Product purchase from Timebound
product attributes; “Brick & Mortar store > Fulfill Order essen > exchange/return;
Customer 4 at physical store peer comparison (Own / 3 party) product feedback
ProductSearch ProductComparison ‘ProductPurchase -—«~ProductRecelpt. _—Product Feedback
By means of our omnichannel approach, we are able to offer a holistic experience to our consumer throughout the
purchase cycle. Our omnichannel experience is media agnostic, involving (either or both) offline and online
interactions, resulting in a seamless product discovery, evaluation, purchase and post-purchase experience.
Our ‘omnichannel experience’ involves a strong interplay of our trade distribution channel and D2C channel. Our
D2C channel has extensively complemented our trade distribution channel towards extending our pan-India reach.
For instance, in the nine months ended December 31, 2021, South India contributed 9.39% of our sale of goods.
Sales through our D2C channel contributed 84.54% of our sale of goods in South India over the same period. As
a result, in South India we were able to achieve significant brand awareness even with a smaller footprint of our
trade distribution network. Our D2C sales in South India will enable us to expand and grow our trade distribution
network in South India in the future.
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across markets
Central
Significant D2C presence 5.77%
in underpenetrated a
geographies complements
the Trade Distribution weit
network to enable a 13.04% Central 83.42% 16.58%
diversified revenue mix Total aaa 36.56%
Rapid Penetration in
coe oe
Metro & Tier | markets 26.89% Eos \
enabled by diverse D2C iS 37.71% '
platiorms (fine & Tier eter
Online) 73.11%
Note: Data as of December 31, 2021
Our omnichannel experience, coupled with our D2C channel scale-up, helped us unlock new consumer bases
while accelerating portfolio premiumization.
Composition of Our Business — Moving Towards Premiumization
Pan-India Footprint and Increasing Contribution from D2C Segment Driving Premiumization
(Revenue Sharan IR om)
Cy area
CAGR e828 CAGR YO ovo: CAGR 821] CAGR Yo uo: CAGR i920)
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Our commitment to quality
Our brand ‘CAMPUS’ stands for high quality product offerings. We have thoughtfully curated our value chain
encompassing shoe upper and sole manufacturing and shoe assembly. Commitment to quality is a core attribute
for every Campus branded product and the entire manufacturing value chain has been designed with quality
control as a central pivot. To ensure adherence to the stipulated quality parameters laid out by Campus, 100% of
the raw material used for making shoe uppers are procured centrally by us. We have a dedicated quality control
team consisting of 58 employees, as on December 31, 2021, that performs various quality inspection and testing
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vendors. 100% of the shoe assembly operation is in-house in order to ensure that every pair has undergone the
requisite quality checks before dispatch.
During the nine months ended December 31, 2021, we (i) set up additional footwear assembly lines at our
manufacturing facilities in Dehradun, Uttarakhand and Baddi, Himachal Pradesh; (ii) additional manufacturing
capacity at our sole manufacturing facility at Ganaur, Haryana; and (iii) additional manufacturing capacity at our
uppers manufacturing facility at Haridwar, Uttarakhand. In Fiscal 2021, we commissioned a sole manufacturing
facility at Ganaur, Haryana and in Fiscal 2020, we commissioned an uppers manufacturing facility at Haridwar,
Uttarakhand. This has allowed us greater control over our manufacturing process, product quality, manage costs
and improve time to market for product launches.
Vertically Integrated Manufacturing Ecosystem
Optimum Balance among Capex Cost, IP Protection and Product Quality
Annwal Assembly Capacity of 28.80mm pairs"!
lr Uppers
VY ©84%6 domestic raw material sourcing
; se Harkdwae Exclusive ancillary network — Outsourced
F) labor-intensive operations while maintainin
» 8
control over quay and acess to
=~ sinc aoucee production panning hh easter
g 2 Iai ines
“2, le + Shoe Sole Sole anellary supplier network in indo
a — iy to manuactre 37 50% of aml ole
\ = . reautement rouse
ST omer While premium designs re manufacture
inhouse for beter gusty nd os conto
iserregied nlend of incase and Protection, genet ones are
outsourced or aster turnaround time
Capacity and Backward
, Assembly
Integration Enabling Flexibility in of shoes camcanaais ——‘Manucturingleadtimes 60-90 dos
ea ee core one coe (Beeman al sseby managed 10% out t
Cop rale Ghd Tite ts MCneE sehatn 7 crmureaerone to manage sti 1
market and quality
S] nsnouse Facies
Hi bocbouse Manufacturing [| outsourced Capacity an
CAMPUS
Note (1): Capacity as of December 3, 2021
We believe that the combination of our in-house manufacturing facilities combined with our integrated and
exclusive supply chain creates an ecosystem that is not easily replicable.
Our Management
Our Chairman has over 37 years of experience in the footwear industry in India. Our senior management team is
a professional team with a combined experience of over 125 years in FMCG, retail, technology and consulting
businesses. We have the backing of two marquee investors, TPG Growth III SF Pte. Ltd. and QRG Enterprises
Limited.
Our financial performance
Our key financial and operational parameters during the relevant periods are as follows:
Parameters Fiscal 2019 Fiscal 2020 Fiscal 2021 Nine months | Nine months
ended December ended
31, 2020 December 31,
2021
Sale of goods @ 5,899.04 7,310.58 7,100.82 4,354.01 8,390.62
million)
Molume (ais, i 12.26 14.36 13.00 8.16 13.65
million)
aAvretage Selling 481 509 546 533 615
Price (@ per pair)!
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Parameters Fiscal 2019 Fiscal 2020 Fiscal 2021 Nine months | _ Nine months
ended December ended
31, 2020 December 31,
2021
Revenue from
operation & 5,948.73 7,320.43 7,112.84 4,361.75 8,418.44
million)?
EBITDA? & 1,018.62 1,383.26 1,198.11 542.85 1,652.15
million)
BBITDS Margin 17.12 18.90 16.84 12.45, 19.63
(ey!
PAT (2 million) 386.00 623.69 268.63* 168.46 848.04
Net Margin (also
known as Profit after 6.49 8.52 3.78 3.86 10.07
‘Tax Margin) (%)°
Retum: on .Baulty® 21.32 25.64 8.99 5.74 23.72
(%)
Retiim! fon. Gepital 21.88 21.03 18.54 6.44 21.39
Employed 7 (%)
‘Average Selling Price is net of all channel margins.
2. Revenue from operations primarily comprises of sales of goods along with scrap sales and in Fiscal 2019, revenue from
operations also included GST budgetary support.
3. EBITDA is calculated as follows: Profit after tax + tax expense + finance costs+ depreciation and amortization expense.
4. EBITDA Margin is calculated as follows: EBITDA divided by revenue from operations.
5. Net Margin (also known as Profit after Tax Margin) is calculated as follows: Profit after tax divided by revenue from
operations.
6. Return on Equity is calculated as follows: Profit after tax divided by average shareholder's equity. For the purposes of
calculation of Return on Equity for the nine months ended December 31, 2020 and December 31, 2021, Profit after tax
is not annualized.
7. Return on Capital Employed is calculated as follows: EBIT divided by capital employed. For further details of RoCE, see
“Financial Statements” on page 249. For the purposes of calculation of Return on Capital Employed for the nine months
ended December 31, 2020 and December 31, 2021, EBIT is not annualized.
* The increase in deferred tax charge was primarily attributable to the amendment of Finance Act, 2021, pursuant to which
goodwill was considered as a non-tax deductible asset. This resulted in derecognition of deferred tax assets on goodwill and
a consequent increase in tax expense to the extent of ® 247.17 million for Fiscal 2021.
Our Strengths
We believe that our competitive strengths are:
India’s largest sports and athleisure footwear brand and fastest growing scaled sports and athleisure footwear
brand with a robust product portfolio across the demand spectrum
We are the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021.
(Source: Technopak Report) We are also the fastest growing scaled sports and athleisure footwear brand (scaled
brands being brands with over % 2 billion of revenue in Fiscal 2019) in India over Fiscal 2019 to Fiscal 2021
(Source: Technopak Report) We had an approximately 15% market share in the sports and athleisure footwear
industry in India by value for Fiscal 2020, which increased to approximately 17% in Fiscal 2021. (Source:
Technopak Report) While the overall sports and athleisure footwear industry revenues fell by 18% in Fiscal 2021
as compared to Fiscal 2020 primarily on account of the COVID-19 pandemic (Source: Technopak Report), our
revenue from operations fell by 2.84% in the same period, which demonstrates the strength of our brand,
distribution network and product portfolio.
We offer one of the widest portfolios of footwear products among sports and athleisure footwear brands in India
in terms of SKUs as of September 30, 2021. (Source: Technopak Report) We cover more than 85% of the total
addressable market for sports and athleisure footwear in India as of Fiscal 2021, which is the largest market
coverage amongst key sports and athleisure footwear brands. (Source: Technopak Report) We have a robust
product portfolio across the demand spectrum and are not dependent on a single demand factor. We increased the
volume of our products sold from 12.26 million in Fiscal 2019 to 14.36 million in Fiscal 2020, with a dip in
volume to 13.00 million in Fiscal 2021 due to the COVID-19 pandemic. Further, the volume of products sold
increased from 8.16 million for nine months ended December 31, 2020 to 13.65 million for nine months ended
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recovery from the impact of the COVID-19 pandemic that resulted in reduced volume of products sold for the
nine months ended December 31, 2020.
We sell our products across price points, geographical locations, and demographics, using our ‘omnichannel
experience’. We are therefore able to cater to the varied requirements of our consumers as well as provide them
with the ease of purchasing our products using the channel most suited to them.
Price
We sell footwear across the entry-level (MRP at or below 21,049), semi-premium (MRP between 21,050 and =
1,499) and premium (MRP at or above 2 1,500). We witnessed a growth in volumes sold of our entry-level
products from 8.16 million pairs in Fiscal 2019 to 9.44 million pairs in Fiscal 2020 and from 5.00 million pairs in
nine months ended December 31, 2020 to 7.15 million pairs in nine months ended December 31, 2021.
Also, we have been increasing the number of launches in our premium category and this has enabled us to increase
the volume of premium products sold over the years. We sold 2.13 million, 2.04 million, 2.81 million, 1.56 million
and 3.79 million premium footwear products in Fiscals 2019, 2020 and 2021 and nine months ended December
31, 2020 and December 31, 2021, respectively. The revenue contribution from our premium products to our sale
of goods has also increased over the years from 31.30% for Fiscal 2019 to 40.59% for nine months ended
December 31, 2021.
In addition, our ASP for our products has increased by 27.77% between Fiscals 2019 and nine months ended
December 31, 2021. For Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and December
31, 2021, our ASP per pair was 2 481, = 509, 2 546, = 533 and % 615, respectively.
Geographical presence
We have a pan India presence. We have an established presence in tier 2 and tier 3 cities. According to Technopak,
tier 1, tier 2 and below cities are poised for growth thereby opening up new opportunities for retailers to expand.
(Source: Technopak Report) In addition, over the years, we have expanded our presence in metro and tier 1 cities
and increased our revenue contribution from metro and tier 1 cities to our sale of goods from 16.66% for Fiscal
2019 to 26.89% for nine months ended December 31, 2021. We also have a small component of export business.
For further details, see “Management's Discussion and Analysis of Financial Condition and Results of Operation
— Overview” on page 323.
Demographics
We offer a wide range of style, color, size and functionality options for men, women, kids and children. As on
December 31, 2021, we have 1,433 active styles of footwear of men, 241 active styles for women and 485 active
styles for kids and children. We have a strong presence in the category for men and it contributed 83.41%, 83.24%,
87.62%, 87.28% and 83.27% of our sale of goods in Fiscals 2019, 2020 and 2021 and nine months ended
December 31, 2020 and December 31, 2021.
Shopping behavior
We provide our consumers an ‘omnichannel experience’ that enables brand discovery and products sales and
marketing through physical locations and varied online channels. For further details in relation to our omnichannel
network, see “-Our Strengths — Robust omnichannel sales and distribution network with pan-India presence and
move to premium category” on page 181.
Sustained focus on design and product innovation facilitating access to the latest global trends and styles
through our fashion forward approach
We started our journey in footwear product design and manufacture with our Chairman, who has over 37 years of
experience in the footwear industry in India. We have a design team that comprises our in-house team in India, a
design consultancy in China and other design sourcing tie-ups. Our external design consultancy advises us on the
latest design, manufacturing and raw material trend that we may adopt and utilize in our manufacturing and sales.
Our design team develops global fashion trends with a local flavor to cater to our target consumers. Our team in
India comprises 48 designers based out of India, as on December 31, 2021.
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to production cycle. For further details in relation to the process undertaken to identify the latest trends and styles,
see ‘“-Our Business and Operations — Process Flow” on page 194. We launch various new styles of footwear with
different features such as shock absorption and reflect technology across our different price categories every year.
We are typically able to launch our products within 120 to 180 days from the date of product conceptualization.
The speed of commercialization helps us to launch products in line with the latest trends and styles in the
international market with customizations for Indian consumers. For instance, we launched 2,580 new designs
between Fiscal 2019 and nine months ended December 31, 2021.
We follow a nimble, fashion forward, segmented approach to curate our product lines. We have several product
development tracks with distinct times to market serving various demand cycles:
> Flagship collection launch process (spring-summer and autumn-winter): this caters to our staple
business which forms the core of our fashion forward process. A majority of our annual designs are
conceptualized and commercialized under these two flagship seasonal launches. We launch two collections
each year, namely, (i) spring-summer by February/March; and (ii) autumn-winter by August/September.
> In-season replenishment: this allows to us capture any demand upside and cater to positive sales of certain
high velocity styles through a swift additional production of high-selling pieces in the collection at any time.
> Design fast track: this involves the quick design, development, and production of new products outside the
normal go-to-market process. We curate and launch innovative concepts such as special drops, exclusive
collaborations and channel partner exclusive merchandise. For instance, we have curated Campus Globalgiri
and Campus Crazies as annual flagship design launches to coincide with the Indian festive period during the
October to December quarter. These are a part of our special drops and limited-edition product design
initiatives.
>» NOOS: this refers to core replenishment products in our portfolio, focuses on creating the base of our
product range over a longer period. It involves identification and manufacture of standard products which
are always in demand across all seasons. We ensure that these models are always available in stock and
continuously replenished as a permanent element of our product portfolio. Our ability to identify and
maintain the NOOS portfolio has helped us successfully introduce efficiency in the manufacturing process
such as the use of a common raw material (such as fabric, yarn or mesh) across multiple styles for multiple
seasons.
This nimble and fashion forward approach in product development is reflected by means of our new launches and
expansive product portfolio. We launched 583 new designs in Fiscal 2021. Our product portfolio is extensive with
1,433 active styles for men, 241 active styles for women and 485 active styles for kids and children as on
December 31, 2021. We offer one of the widest portfolios of footwear products among sports and athleisure
footwear brands in India in terms of SKUs as of September 30, 2021. (Source: Technopak Report)
We have also been steadily increasing the number of launches in our Premium category. We launched 122 new
styles in this category in Fiscal 2021 compared to 106 new styles in Fiscal 2020 and this enabled us to increase
the ASP of our products for our new style launches.
Difficult to replicate integrated manufacturing capabilities supported by robust supply chain
We own and operate five manufacturing facilities across India with an installed annual capacity for assembly of
28.80 million pairs as on December 31, 2021. Our manufacturing facilities have installed capacity to manufacture
4.80 million footwear uppers and 10.80 million footwear soles annually as on December 31, 2021. Our
manufacturing facilities give us the ability to manufacture 37.50% of our requirements of soles and 16.67% of
footwear uppers in-house and 100% in-house assembly of all our products. For further details in relation to our
manufacturing facilities, see “- Our Business and Operations — Manufacturing Facilities” on page 188.
The manufacturing of shoes is a labor-intensive process. We have achieved a balance between in-house
manufacturing and assembly of our products and outsourced manufacturing for key components and labor-
intensive activities.
In addition to our in-house manufacturing capacity, we have created a large fabricator and sole ancillary supplier
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our high capital expenditure costs and protect our design intellectual property. We empanel our suppliers and
require that they commit to exclusive arrangements with us while adhering to strict quality control and
confidentiality requirements. Our predominantly India based supplier network limits the requirement for imports
and dependence on offshore suppliers. This limits our risk of supply chain disruptions and foreign exchange
fluctuations, while reducing manufacturing lead times. We source 100% of the raw material requirements for all
our suppliers and fabricators. Our fabricator and sole supplier network is difficult to replicate for the following
reasons:
© Upper Manufacturing: it is labor-intensive and 83.33% outsourced. Entire ancillary network is exclusive to
us. Exclusivity also gives us control over quality and access to production planning which leads to faster
turnaround times.
¢ Sole manufacturing: 62.50% is outsourced. Sole manufactured for complex, premium products are controlled
by us to control quality, turnaround time and protect our intellectual property. For generic manufacturing,
which is volume based and easier to manufacture, we outsource it with little impact on manufacturing
timelines and pressure on turnaround times. We are entitled to preference in capacity allocation and
turnaround times and undertake 100% inspection of all soles for quality control.
100% of the shoe assembly operation is in-house in order to ensure that every pair has undergone the requisite
quality checks before dispatch, thus allowing us to manage cost, the time to market as well as its quality.
We believe that the combination of our in-house manufacturing facilities combined with our integrated supply
chain creates an ecosystem that is not easily replicable. This combination provides us with a manufacturing lead-
time of 60 to 90 days compared to the industry average of 90 to 120 days. (Source: Technopak Report). Further,
our combination allows us to ensure swift manufacturing of products from product conceptualization to product
launch. We typically are able to complete this within 120 to 180 days. The speed of commercialization helps us
to launch products in line with the latest trends and styles in the international market with customizations for
Indian consumers.
Robust omnichannel sales and distribution network with pan-India presence and move to premium category
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Established Pan-india sales network with expansive reach,
Use of entire digital ecosystem across Pure-Play
deep engagement and efficient financing
Marketplace, Managed Marketplace, Online to Offline
marketplaces
19,200 425+ 152
Retail Touchpoints Distributors Employee Internal 7mm+
Sales Force ‘SKUs/pairs sold through online channels since FY19
28 664 Leading footwear brand on
States Cities
Flipkart Myntra Nykaa
Multiple drops and limited edition launches
we
85 800+
EBOs _Large Format Stores
Exclusive and Multi-format D2C Network
Source: Data as of December 31, 2021
Our ‘omnichannel experience’ involves a confluence of multiple retail channels covering physical locations and
online channels to provide consumers a seamless experience. Our consumers are able to visit any channel to
experience our brand and products, make selections and comparisons and purchase the product through their most
preferred channel. The integration of our physical and online channels is integral to our ability to remain connected
with consumers through all touchpoints in the consumers’ journey.
By means of our omnichannel approach, we are able to offer a holistic experience to our consumer throughout the
purchase cycle. Our omnichannel experience is media agnostic, involving, either or both, offline and online
interactions, resulting in seamless product discovery, evaluation, purchase and post purchase experience.
Our ‘omnichannel experience’ involves a strong interplay of our trade distribution channel and D2C channel. Our
D2C channel has extensively complemented our trade distribution channel towards extending our pan-India reach.
For instance, in the nine months ended December 31, 2021, South India contributed 9.39% of our sale of goods.
Sales through our D2C channel contributed 84.54% of our sale of goods in South India over the same period. As
a result, in South India we were able to achieve significant brand awareness even with a smaller footprint of our
trade distribution network. Our D2C sales in South India will enable us to expand and grow our trade distribution
network in South India in the future.
Strong brand recognition, innovative branding and marketing approach
We believe that we have a strong brand that our consumers trust, as evidenced by our leadership position in the
sports and athleisure footwear industry in India. Pivoted on style and comfort, our brand aims to generate an
optimum blend of aspiration and value proposition for our target consumers seeking quality sports and athleisure
footwear in the latest trends and designs at attractive prices. We are one of the only Indian brands in the premium
category of the sports and athleisure footwear industry in India as of Fiscal 2021. (Source: Technopak Report)
We have spent a considerable amount of time conceptualizing and implementing a unique brand awareness and
marketing strategy to move from stand-alone trade led marketing to direct-to-consumer marketing. Our marketing
and sales efforts spread across multiple touch points where consumers discover our brand and our product
offerings. Over Fiscals 2019, 2020, 2021 and nine months ended December 31, 2020 and December 31, 2021, we
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advertising and sales promotion, of which 2 14.56 million, = 35.70 million, = 103.58 million, = 76.97 million and
2 167.72 million was towards digital advertising. We have empaneled a leading advertising agency and a media
planning enterprise to curate and execute themed advertising and marketing campaigns to relate to our target
consumers and grow consumer loyalty and increase brand acceptance.
In addition, we have undertaken several special drops and limited edition products over the last three Fiscals and
nine months ended December 31, 2021 in partnership with online pure play market places such as Flipkart. As
part of such collaborations, we have successfully curated digital media native brand assets such as Campus
Globalgiri and Campus Crazies. Campus Globalgiri and Campus Crazies are annual flagship design launches
during the Indian festive period during the October to December quarter. Products launched during these special
drops include premium material and styling, unique color palette, latest design trends, premium packaging,
attractive pricing and a holistic consumer experience.
The following chart highlights our various marketing touchpoints:
Brand building initiatives among all segments with acceptance levels across target customers groups
Marketing Strategy
Pivoted away from stand-alone trade channel-
oriented marketing to consumer-oriented
marketing techniques
Out-of-Home coverage
Expansive out-of-home billboard coverage
ona Pan-India level
Social media engagement
Confluence of celebrity and influencer-
based engagement directed towards
objectives of social community building
and following
Comprehensive EBO Revamp
Rebranding and updation drive
undertaken across the entire geo-
tagged MBO network
Expansive TV campaign
Thematic TV campaigns such as “Ab Waqt
Hai Humara” and “Campus Crazies” among
others
Advertising and sales promotion spend of INR 1.5bn+ since FY19
Out-of-Home coverage
ce.
Comprehensive EBO
Revamp
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cael
Peryu) sive
Pearl
humara!
Social Media Engagement
The case study below provides the diversity of our marketing campaigns:
Global- Flipkart Campaign
We partnered with Flipkart in Fiscal 2019 to bolster sales during Flipkart’s annual flagship event, the Big Billion
Day. We highlighted our brand as being aspirational, accessible and affordable fashion. We launched an integrated
marketing campaign combining various online and offline means of targeting consumers. We had (i) concurrent
“go-live” at over 400 high traffic out of home billboards across over 20 cities in India; (ii) TV campaigns for reach
and frequency; and (iii) social media influencers, online advertisements on websites and social media sites. This
campaign allowed us to (i) identify relevant sales touch points and location mapping, (ii) better understand our
consumer journey and their preferences, and (iii) identify key consumer touch-points. We believe that the insights
from this campaign have helped us elevate our omnichannel experience, market more effectively and target
increased online sales. We had 81.85% and 138.94% year-on-year growth in sales through the Flipkart Big Billion
Day in Fiscal 2020 compared to Fiscal 2019 and Fiscal 2021 compared to Fiscal 2020, respectively.
Our experienced management team
Our Chairman has over 37 years of experience in the footwear industry in India. Further, our senior management
team is a professional team with a combined experience of over 125 years in FMCG, retail, technology and
consulting businesses. Our Board of Directors support and provide guidance to our management team. Our Board
of Directors include eight Directors with several years of experience. Our strategic investors TPG Growth III SF
Pte. Ltd. and QRG Enterprises Limited have supported us through multiple business initiatives such as incubation
of direct-to-consumer vertical, transformation of our supply chain, brand building initiatives and hiring of human
capital.
Our Strategies
The primary elements of our business strategy are provided below:
Leverage our brand and leadership position to benefit from the growth in the Indian sports and athleisure
market with a focus on women, children and kids
The Indian footwear retail market is expected to grow at a CAGR of 8% from Fiscal 2020 to Fiscal 2025, and
21.6% from Fiscal 2021 to Fiscal 2025, being one of the fastest growing discretionary categories from Fiscal 2021
to Fiscal 2025. (Source: Technopak Report) We were also the fastest growing scaled sports and athleisure brand
in India over Fiscal 2019 to Fiscal 2021. (Source: Technopak Report) Our leadership position in this fast growing
segment provides us with an opportunity to grow our business and take advantage of the growth in our target
segment.
The Indian sports and athleisure segment is expected to benefit from increasing health awareness, rising levels of
disposable income in India, favorable trends in Indian demographics such as increasing population of young adults
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compared to developed economies. The Indian government’s ‘Make in India’ initiatives as well as GST policies
further benefit products manufactured in India. (Source: Technopak Report) We believe these factors will enable
us to maintain and consolidate our leadership position in this industry segment. We intend to enhance the number
of styles and products in the women and kids and children category. We have launched 43, 31, 45, 36 and 92 new
styles in the women segment and 229, 231, 119, 71 and 159 new styles in the kids and children category, in Fiscals
2019, 2020, 2021 and nine months ended December 31, 2020 and December 31, 2021, respectively. Currently,
this category has a number of players selling unbranded products with limited offerings from established players.
We intend to leverage our brand, quality and pricing strategy to increase our market penetration in the women and
kids and children categories.
Further expand and deepen our omnichannel experience
We intend to deepen and expand all the various elements of our omnichannel experience such as our trade
distribution network, exclusive brand outlet (“EBO”) presence and increase our online sales. Our existing trade
distribution network covers most of North and East India. We aim to expand our trade distribution network in
India through two steps:
« Increase distribution network in states we currently operate: We have added 190 and 70 new distributors in
Fiscal 2021 and nine months ended December 31, 2021, respectively. In addition, we have added 9,786 and
2,085 new retail points of sale in Fiscal 2021 and nine months ended December 31, 2021. We aim to continue
to increase the distribution network in the states we currently operate.
« Deepen our presence in western and southern regions of India: We are a pan-India brand and have been
steadily increasing our distribution coverage. As at December 31, 2021, we service to retail outlets in 664
cities of India. We have sold our products in 130 new cities in India in Fiscal 2021 and another 130 new cities
in India in nine months ended December 31, 2021. For further details in relation to our split of our sale of
goods between the northern, southern, eastern, western and central regions of India during Fiscals 2019, 2020
and 2021 and nine months ended December 31, 2020 and December 31, 2021, see “-Our Business and
Operations — Distribution” on page 199. We aim to actively target and deepen our presence in western and
southern regions of India.
In addition, we aim to increase the roll out of our EBOs and franchisees to increase our presence in select
geographies across India. We expect that these initiatives will substantially increase our network coverage across
India. Further, we intend to employ more personnel in our internal sales force.
Further, our split of sale of goods from online sales and offline sales was 32.37% and 67.63% as of December 31,
2021 and 21.15% and 78.85% in Fiscal 2021 compared to 2.87% and 97.13% in Fiscal 2019. This is a significant
ramp-up in online and offline mix of revenue and we intend to focus on improving our online sales in the future.
We will continue our strategy of special drops, influencer-based consumer engagement, limited edition ranges
and specially manufactured ranges for online channels as well as increased marketing focus on online channels.
Targeted product development to increase diversification
We aim to diversify our revenues from operations through a number of measures:
Consumers across pricing cohort:
co Entry level: we have launched 335 and 309 new styles in the entry-level category in Fiscal 2021 and
December 31, 2021 to enable consumers to move from unbranded to branded category of sports and
athleisure footwear. We intend to maintain focus on the entry level category to introduce consumers to
our brand at a compelling value.
o Premiumization: we have been steadily increasing the number of launches in the premium category of
the sports and athleisure segment. We launched 122 new styles in this category in Fiscal 2021 compared
to 106 styles in Fiscal 2020. Consequently, the revenue contribution from our premium products to our
sale of goods has increased over the years from 31.30% for Fiscal 2019 to 40.59% for nine months
ended December 31, 2021. We intend to increase focus on the premium segment of the market to capture
new consumers and elevate customer experience of existing consumers.
« Focus on direct to consumer: We have launched 153, 311, 293, 161 and 348 new products for online channels
in Fiscals 2019, 2020, 2021 and nine months ended December 31, 2020 and December 31, 2021, respectively.
We aim to continue to undertake targeted marketing and sales efforts for increasing online sales. For further
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expand and deepen our omnichannel experience” on page 185. We also intend to increase the numbers of
our EBOs over time. Our revenue from sale of goods from our D2C channel have increased by 774.37%
between Fiscal 2019 and the nine months ended December 31, 2021. Our omnichannel strategy and our focus
on direct to consumer sales are intended to continue to grow the share of this channel in our sale of goods.
© Category: We intend to enhance the number of styles in the open footwear category to meet demand in the
summer and rainy seasons.
We intend to continue to invest in and integrate our supply chain
We rely on a network of suppliers and manufacturers for a number of our raw materials and components in the
manufacture of our products. During the nine months ended December 31, 2021, we (i) set up additional footwear
assembly lines at our manufacturing facilities in Dehradun, Uttarakhand and Baddi, Himachal Pradesh; (ii)
additional manufacturing capacity at our sole manufacturing facility at Ganaur, Haryana; and (iii) additional
manufacturing capacity at our uppers manufacturing facility at Haridwar, Uttarakhand. In Fiscal 2021, we
commissioned a sole manufacturing facility at Ganaur, Haryana and in Fiscal 2020, we commissioned an uppers
manufacturing facility at Haridwar, Uttarakhand. Our manufacturing facilities give us the ability to manufacture
37.50% of our requirements of soles and 16.67% of footwear uppers in-house and 100% in-house assembly of all
our products. This has allowed us to demonstrate greater control over the manufacturing process, manage costs
and improve time to market for product launches. We also intend to expand our manufacturing capabilities over
time and will look to acquire land and construct manufacturing facilities over time. We intend to continue to
evaluate options to further backward integrate in other aspects of our manufacturing process. This may be through
acquisitions as well. We will evaluate acquisition opportunities based on whether such acquisitions will allow us
to reduce the reliance on the supply chain, particularly third party vendors and suppliers, ensure quality control,
give us cost optimization opportunities and protect our design intellectual property. We believe that our
experienced operational and management teams will enable us to identify, structure, execute and integrate
acquisitions effectively.
Continued focus on digitization to sharpen product focus and drive retail sales
We have implemented a number of digitization initiatives including systems for enterprise resource planning
(ERP), distribution management system (DMS), field force management, point-of-sales (PoS), e-commerce order
management (OMS) and a retailers’ engagement application. These systems will enable capture and provide us
with significant inputs in the manufacturing and sales process. We are able to analyze the data arising from these
systems to understand consumer trends, inventory and sales positions and plan our marketing and sales activity.
As these systems generate further data, they will allow us a better understanding of consumer preferences that will
aid us in our product development, enable market testing and flexibility to scale up popular designs with quick
turnaround times. Our digitization efforts will enable us to have a sharper product focus while managing our
distributor and retailer relationships.
Targeted acquisitions of products and brands
We evaluate opportunities to grow our business inorganically from time to time. We would continue to seek
opportunities that complement and grow our product offerings as well as ancillary products in the sports and
athleisure category. We may also look to increase our portfolio of brands through acquisitions to provide our
consumers with differentiated offerings. We have not identified any specific targets as on date but intend to
continue to evaluate these opportunities from time to time.
Our Business and Operations
Our Company is primarily engaged in the manufacturing, distribution and sales of sports and athleisure footwear
products. We are the largest sports and athleisure footwear brand in India, both in terms of value and volume in
Fiscal 2021. (Source: Technopak Report) Further, we have a comprehensive footwear portfolio and we cover
more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal 2021.
(Source: Technopak Report)
Products
We offer one of the widest portfolios of footwear products among sports and athleisure footwear brands in India
in terms of SKUs as of September 30, 2021. (Source: Technopak Report) As on December 31, 2021, we cater to
consumer needs across demography, price and style.
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Demographics
The following table sets forth the total number of active styles, volumes manufactured and sold by us across the
different demographics in Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and December
31, 2021:
Active styles SORES Volumes sold (pairs in million)
(pairs in million)
Nine] Nine Nine] Nine Nine | Nine
Fisc | Fisc | Fisc | months | months | Fisc | Fisc | Fisc | months | months | Fisc | Fisc | Fisc | months | months
al | al | al | ended | ended | al | al | al | ended | ended | al | al | al | ended | ended
201 | 202 | 202 | Decem | Decem | 201 | 202 | 202 | Decem | Decem | 201 | 202 | 202 | Decem | Decem
9 | 0 | 4 | ber3t, | ber3t,) 9 | 0 | 1 | ber3t,] ber3t,| 9 | 0 | 1 | ber3t, | ber3i,
2020 | 2021 2020 | 2021 2020 | 2021
Men | 917 | 1,16 | 1,31 970 | 1,433] 922] 104] 110] 690] 1095] 666] 100] 104] 658] 1051
3] 0 4[| 2 5| 8
Wom | 107 | 100 | 152 120 21 | 0.65 | 069} 080] 051] 130) 001] 009] 067} 046) 1.23
en
Kids | 429 | 553 | 548 383 75 | 3.20) 396] 105) 108; 213) 209]; 3e2) 105] 112) 191
and
Childr
en
145 1e1) 201) 1473; 2,159/ 130) 150] 136) 649] 1438] 122] 143 | 130| 816) 13.65
total | 3{| 6| 0 7| 9] 7 6| 6| 0
Price
The following table sets forth the total number of active styles and volumes sold by us across the different price
ranges in Fiscal 2019, 2020 and 2021 and nine months ended December 31, 2020 and December 31, 2021:
Active styles Volumes sold (pairs in million)
Nine Nine Nine Nine
ore months months months months
range | Fiscal | Fiscal | Fiscal Fiscal | Fiscal | Fiscal
2019 | 2020 | 2021 ended ended 2019 | 2020 | 2021 ended ended
December | December December | December
31, 2020 31, 2021 31, 2020 31, 2021
At or 1,001 1,193 1,302 911 1,227 8.16 9.44 751. 5.00 7.15
below
21,049
21,050 — 308 375 387 331 498 1.97 2.88 2.28 1.60 2.71
u1,499
At or 144 248 321 231 434 2413 2.04 2.81 1.56 3.79
above
21,500
Total 1,453, 1,816 2,010 1,473 2,159 12.26 14.36 13.00 8.16 13.65
The percentages of sale of goods we made in each of these price ranges for Fiscals 2019, 2020 and 2021 and nine
months ended December 31, 2020 and December 31, 2021 is shown in the below table:
Price range Fiscal 2019 (%) | Fiscal 2020(%) | Fiscal 2021 (%) Nine Nine months
months ended
ended December 31,
December 2021 (%)
31, 2020
(%)
At or below 21,049 47.63 46.86, 46.08 38.05
21,050 — 21,499 21.07 28.01 21.16 21.36
At or above 71,500 31.30 25.13 32.76 40.59
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segment. We sold 2.13 million, 2.04 million, 2.81 million, 1.56 million and 3.79 million premium footwear
products in Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and December 31, 2021,
respectively. The revenue contribution from our premium products to our sale of goods has also increased over
the years from 31.30% for Fiscal 2019 to 40.59% for nine months ended December 31, 2021. For further details
in relation to ASP of our products in Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and
December 31, 2021, see “- Our Strengths — India’s largest sports and athleisure footwear brand and fastest
growing scaled sports and athleisure footwear brand with a robust product portfolio across the demand spectrum
- Price” on page 179.
Style
The styles of our footwear can generally be categorized into the open footwear and closed footwear categories.
Open footwear includes sandals and slippers. Closed footwear refers to footwear such as shoes and boots. Our
consumers typically purchase open footwear as compared to closed footwear in the summer and rainy seasons.
Manufacturing facilities
We own and operate five manufacturing facilities across India with an installed annual capacity for assembly of
28.80 million pairs as on December 31, 2021. We have the ability to increase production for assembly of up to
35.50 million pairs on an annual basis. We have an in-house production capacity of 4.80 million footwear uppers
and 10.80 million footwear soles along with a third party annual capacity of 24.00 million footwear uppers and
18.00 million footwear soles. Our capability to produce more than a third of our footwear soles in-house facilitates
allows for a faster turnaround from raw material to final product than compared with industry standards. We
procure most of our machinery from countries such as China and Taiwan.
Dehradun, Uttarakhand (“Dehradun Facility”)
We commenced operations at our Dehradun Facility in Fiscal 2009. We do assembly operations in respect of
sports shoes and open footwear at our Dehradun Facility. The Dehradun Facility sources power from State
Electricity Board and underground water is drawn through a bore well.
Baddi, Himachal Pradesh (“Baddi Facility” and “Campus AI Baddi Facility”, collectively, the “Baddi
Facilities”)
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We have two facilities located in Baddi, Himachal Pradesh. We commenced operations at our Baddi facility and
Campus AI Baddi facility in Fiscals 2005 and 2015, respectively. We do assembly operations in respect of sports
shoes and open footwear at our Baddi Facilities. The Baddi Facilities source power from State Electricity Board
and water from HIMUDA.
Haridwar, Uttarakhand (“Haridwar Facility”)
We commenced operations at our Haridwar Facility in Fiscal 2020. We manufacture uppers at our Haridwar
Facility. The Haridwar Facility sources power from State Electricity Board and water from SIDCUL.
Ganaur, Haryana (‘““Ganaur Facility”)
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The Ganaur Facility sources power from State Electricity Board and underground water is drawn through a bore
well.
Capacity and capacity utilization
The following table sets forth the installed production capacity of our manufacturing facilities as on December
31, 2021 and the capacity utilization for the Fiscals 2019, 2020 and 2021 and nine months ended December 31,
2020 and December 31, 2021:
Facility | Products Fiscal 2019* Fiscal 2020* Fiscal 2021* Nine months Nine months
ended December | ended December
31, 2020* 31, 2021**
Installe | Capaci | Installe | Capaci | Installe | Capaci | Installe ] Capaci | Installe | Capaci
d ty d ty d ty d ty d ty
product | utilizat | product | utilizat | product | utilizat | product | utilizat | product | utilizat
ion ion (%) | ion ion (%) | ion ion (%) | ion ion ion ion
capacit capacit capacit capacit | (%)** | capacit | (%)**
y y y y y
(million (million (million (million (million
pairs) pairs) pairs) Pairs) pairs)
Dehradun | Assembly 7.80 | 71.79 9.40 | 63.83 10.90 | 55.05 10.30 | 59.17 11.70 | 81.37
Facility | of
Footwear
Baddi ‘Assembly 4.60 | 69.57 4.60 | 82.61 4.60 | 52.17 4.60 | 32.10 7.00 | 58.59
Facility | of
Footwear
Campus | Assembly 8.30 | 50.60 8.30 | 60.24] 1010] 51.49 8.30 | 52.83 10.10 | 72.47
Al Baddi | of
Facility | Footwear
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Facility] Products Fiscal 2019* Fiscal 2020" Fiscal 2021" Nine months Nine months
ended December | ended December
31, 2020* 31, 2021**
Installe | Capaci | Installe ] Capaci | Installe | Capaci | Installe | Capaci | Installe | Capaci
d ty d ty a ty d ty d ty
product | utilizat | product | utilizat | product | utilizat | product | utilizat | product | utilizat
ion ion (%) | ion ion (%) | ion ion (%) | ion ion ion ion
capacit capacit capacit capacit | (%)** | capacit | (%)**
y y y y y
(million (million (million (million (million
pairs) pairs) pairs) pairs) pairs)
Haridwar Footwear - - 2.30 21.74 2.30 52.17 2.30 49.78 4.80 79.96
Facility** | uppers
“
Ganaur Footwear - - - - 9.60 27.08 - - 10.80 58.71
Facility# | sole
*This is based on the information and explanation and on review of the various documents related to records for production, visits to
the manufacturing facilities and management presentations, as carried out by the Chartered Engineer.
**These figures are annualized average capacity utilization numbers.
“We commenced commercial production at our Haridwar Facility on August 24, 2019.
# We commenced commercial production at our Ganaur Facility on October 28, 2020.
Manufacturing process
We assemble footwear primarily at our three manufacturing facilities, Dehradun Facility, Baddi Facility and
Campus AI Baddi Facility using two different techniques, namely, ‘stuck on’ and ‘direct injection process’. In
case of ‘stuck on’, we paste the footwear upper and sole together. In case of ‘direct injection process’, the footwear
soles are molded directly on to the footwear upper without the use of stitching. These processes use a combination
of mechanized and human skill to achieve the desired standards.
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SCREEN PRINTING
‘TPU FUSING
EVELETING
STITCHING
WELDING
UPPER MANUFACTURING ©
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SOLE MANUFACTURING ©
en
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‘STROBELING
SEAT LASTING
ADHESIVE APPLICATION
ASSEMBLY ©
Manufacturing Cycle
A majority of our annual designs are conceptualized and commercialized under these two flagship seasonal
launches. We launch two collections each year, namely, (i) spring-summer by February/March; and (ii) autumn-
winter by August/September.
Each collection usually takes around 120 to 180 days from product planning to commercialization. We receive
feedback from various channel partners to assess demand and trends in different regions, thereby enabling us to
efficiently forecast the demand for our products.
Process Flow
Our products have gained pan-India wide recognition for their innovation, quality and performance, across our
diverse portfolio of brands.
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Prototyping and designing
We believe one of our key strengths is our internal design and product development team, which designs products
that reinforce our brand image. We curate a detailed design brief every year based on our annual operating plan.
We further process it in accordance with the design calendar for the year. We have integrated our processes across
the entire value chain from design prototyping to distribution and retail to ensure that our portfolio is successfully
transition from conceptualization to commercialization.
Our research and development and design team conceptualize and develop different patterns to create final
samples. We use our raw materials and stock-in-trade across multiple designs and this enables our design
conceptualization and commercialization teams to optimally utilize base raw materials with minimal raw material
obsolescence. We have a highly experienced design team of 48 designers based out of India as at December 31,
2021, supplemented by a global design consultancy network and design sourcing tie-ups. Our designers work
exclusively for us on a full time consultancy basis.
Our design team improvises product concepts based on the latest global trends and styles in the sports and
athleisure industry tailored to suit Indian preferences. Designing for a season begins nearly six to eight months
prior to the upcoming season. The sketches are sent to heads of departments and key decision makers. Thereafter,
our prototype team makes prototypes of our products using samples in various colors.
The following chart sets forth the various steps involved in the development of a sample:
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2D & SPEC CREATION
PATTERN CUTTING
UPPER TREATMENT
LASTING
FINAL SAMPLE
DESIGN & COMMERCIALIZATION ©
Our design team is located at Delhi. Our design and product development laboratory is equipped with design and
graphic tools that enables footwear designing in 2D as well as the ability to model the price of manufacture of the
show. We also have various tools to decorate footwear components with varied colors, schemes and templates at
our design and product development laboratory.
Exhibition and order placement
As of December 31, 2021, our sales team of over 210 employees interacts with our channel partners to gather
product feedback pertaining to market demand and product acceptance. Our prototypes of approved samples are
displayed at the partner meets. We organize partner meets on a pan-India level before the commencement of each
season to provide distributors, retailers and other channel partners a teaser of our upcoming collection. We prepare
an order book for the upcoming season based on interactions with our channel partners and requirements. Our
sales team thereafter co-ordinates with the research and development, planning and supply chain teams to ensure
that the products are manufactured and supplied in a timely manner.
Procurement
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31, 2021. For further details in relation to our raw materials, see “- Procurement and Raw Materials” on page
198.
Manufacturing
We manufacture and assemble our products at our five manufacturing facilities. We also rely on third party
fabricators and suppliers for the manufacture of components of our products. We also outsource some products to
third party manufacturers on a contract basis. For further details of our manufacturing facilities, see “-Our
Business and Operations - Manufacturing Facilities” on page 188.
Distribution and retail
We have created a comprehensive distribution network across trade distribution and direct-to-consumer channels.
For further details, see “- Our Business and Operations - Distribution” on page 199.
The following chart sets out the detailed manufacturing process flow chart:
Conceptualization of Design
-» Development of different pattern trials
oK
Sales Samples sent to Sales channel
First cut planning received
Order for New Designs
Order for Legacy Designs
Commercialization
Production Material Ordering
Creation of Production Samples
Hand over of Prod. Samples & RM receiving
Reject
mie oo ' a
'NO
es se
OK Warehouse &
Production & Finishing Dispatch
Vertical Integration
Our vertically integrated approach to manufacturing is at the core of our consistent product quality and resulting
high consumer satisfaction. Our sports and athleisure footwear operations are vertically integrated, whereby we
design each product, source the raw materials, and then manufacture key components, assemble, finish and
package at our owned facilities. We design our sports and athleisure footwear products internally and source the
components or finished goods from select vendors that develop and manufacture our designs.
We have a long-standing history of successful vertically integrated manufacturing in our footwear businesses. We
design all facets of the footwear, including upper patterns, insoles, outsoles and traction elements. Raw materials
for the footwear uppers and insoles and component parts for the outsoles and traction elements are sourced mostly
from India through independent third party suppliers.
We have created long-standing relationships with several independent supply groups that have expertise and
quality capabilities consistent with our high standards and specifications. We are not reliant on any single supplier
of materials that we require annually to be able to produce our footwear.
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Our primary raw materials include sole, fabric, chemicals and adhesives, laminated fabric, ethylene-vinyl acetate
(“EVA”), box, insole and others such as PVC compound, PVC leather cloth, PU leather cloth and outer cartons.
We outsource the manufacturing of finished footwear uppers to over 80 job workers as on December 31, 2021,
who provide the finished footwear upper using the raw materials provided by us and as per our design
specifications. We conduct stringent quality checks on the raw materials and finished footwear upper. In addition,
we source our regular soles from India and China. For the soles developed by us, we share our specifications with
the vendors, who create such soles exclusively for us.
We source approximately 94% of our raw materials locally in India. The remainder of our raw materials are
sourced from countries such as China, South Korea and other South-East Asian countries. We also supply all of
the raw material requirements of our fabricators. We currently procure raw materials on a purchase order basis at
negotiated rates. Details of the raw material supplied and share of raw material cost in Fiscal 2021 and the nine
months ended December 31, 2021 are as follows:
S.No. Raw Material Number of Active Percentage of total raw material costs for
supplied suppliers' Fiscal 2021 Nine Months ended
December 31, 2021
1, Sole 27 33.32% 32.34%
2. Fabric 11 2.18% 1.14%
3. Chemical and adhesives 40 6.33% 6.21%
4. Laminated Fabric 13, 11.59% 11.88%
5. EVA 23 4.61% 8.83%
6. Box 21 7.25% 7.05%
7. Insole $. 4.84% 5.03%
8. Others 299 29.88% 27.52%
9. Total 443 100% 100%
Note: 1. Active suppliers represent vendors from whom we have bought raw materials in the last nine months.
Our total cost of materials consumed in Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020
and December 31, 2021 amounted to @ 3,241.99 million, 2 4,138.34 million, = 4,005.97 million, 2,395.09 million
and 2 4,618.82 million, respectively, and represented 54.50%, 56.53%, 56.32%, 54.91% and 54.87% of our
revenue from operations in these periods, respectively. For further details in relation to purchases of stock-in-trade
and changes in inventories of finished goods, stock-in-trade and work in progress, see “Management's Discussion
and Analysis of Financial Condition and Results of Operations” on page 323. The following table sets forth the
breakdown between in-house and outsourced production capacity, as at December 31, 2021:
Product Facility In-house Outsourced Total (In In-house Outsourced
Capacity Capacity | Pairs Million) | Capacity % | Capacity %
(In Pairs (In Pairs
Million) Million)
Assembly of | Dehradun 28.80 0.00 28.80 100.00 0.00
Shoes Facility, Baddi
Facility and
Campus Al
Baddi Facility
Uppers Haridwar 4.80 24.00 28.80 16.67 83.33
Facility
Shoe Sole Ganaur 10.80 18.00 28.80 37.50 62.50
Facility
Finished Products and Raw Materials Handling and Storage
We usually keep two to four months of inventory of raw materials at our facilities. The ability to store raw
materials at our facilities enables us to withstand disruptions in supply as well as volatility in the price of raw
material. We plan our inventory levels based on existing inventory levels, inbound delivery timelines and expected
order pipelines.
Our storage facilities allow us to avoid suspending our production processes, which are costly and time consuming
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times by being able to meet consumers’ demand in full and on time. Our manufacturing lead-time of 60 to 90
days, compared to the industry average of 90 to 120 days (Source: Technopak Report), means that we are also
able to more swiftly meet changing market demand than our competitors.
The following table sets forth our capacity to store finished products at our distribution centers as of December
31, 2021:
Distribution Center Location Storage Capacity (in Sq meter)
Trade distribution:
‘Ambala 12,077.40
Shambhu 10,219.33
D2c:
Delhi (Mundka, Swarn Park and Tikri) 5,927.21
Dehradun 2,229.67
Baddi 3,251.61
Distribution
We have established an expansive ‘omnichannel experience’, pan-India distribution network, across trade
distribution and direct-to-consumer channels to drive sales of our footwear and increase volumes of sales in the
premium category.
we Multi-Brand Trade
Distributor, ——— Outlets Distribution
E-Commerce
Platforms
Exclusive Direct to
Brand Outlets Consumer
Modern
Trade
We have two channels of distribution, namely, (i) trade distribution, and (ii) direct-to-consumer. Our direct-to-
consumer is split into offline direct-to-consumer and online direct-to-channel. For further details in relation to the
revenue contribution from trade distribution and direct-to-consumer channel, see “Management's Discussion and
Analysis of Financial Conditions and Results of Operation - Overview” on page 323.
¢ — Trade distribution
We have over 425 distributors directly servicing and fulfilling orders of over 19,200 geographically mapped
retailers at a pan-India level as on December 31, 2021. We have executed agreements with all our distributors
and which carry a credit term of 30 to 60 days. We have a diversified sales mix across our trade distribution
channel and our top 15 distributors contributed 21.13% and 13.20% towards our sale of goods in Fiscal 2021
and nine months ended December 31, 2021.
We have a diversified regional sales mix and the following table sets forth the percentage of revenues from
operations using our trade distribution channel, that was derived from northern, southern, eastern, western
and central regions of India during the Fiscals 2019, 2020 and 2021 and nine months ended December 31,
2020 and December 31, 2021:
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Nine monins Nine months
: Fiscal 2019 (in| Fiscal 2020 (in | Fiscal 2021 (in ended
Regions Z 3 Z ended December
%) %) %) December 34, | “Sort gn 26)
2020 (in %)
North 60.22 61.24 59.14 61.00 53.15,
South 7.64 6.56 6.73 7.24 9.39
East 18.39 17.18 19.29 18.09 18.64
West 6.34 7.04 7.48 6.44 13.04
Central 7.38 7.94 7.36 7.23 5.77
Export 0.03 0.04 0.00 0.00 0.01
Total 100.00 100.00 100.00 100.00 100.00
Direct-to-consumer
This channel consists of online and offline direct-to-consumer channels. Our offline direct-to-consumer
channel includes EBOs and LFS and our online direct-to-consumer channel includes e-commerce platforms.
We have an expansive online presence across several e-commerce channels such as Flipkart, Myntra, Udaan
and Fynd, among others, as well as our own e-commerce website. We have different strategies across
channels varying from pure play market places and e-commerce platforms for outright sales, ‘sale or return’
sales and online to offline sales. Through these channels we are able to reach consumers across all 28 states
and eight union territories of India and a total of 664 cities in India as on December 31, 2021. We also target
special sales days and new design drops on online channels to generate demand for premium products. Our
revenues from operations through our e-commerce platforms grew at a CAGR of 197.95% between Fiscal
2019 and Fiscal 2021. For further information on the online marketing campaigns we have engaged in with
these partners which have helped drive our online revenue growth, as well as our online presence across
various e-commerce channels, see “Our Business and Operations - Online presence” on page 204.
In addition, we operate our EBOs under two models: through company opened company operated stores
(“COCOs”) and franchisees. We have 57 COCOs and 28 franchisees as on December 31, 2021. We have
launched our EBOs in select geographies in India, with an intent to “premiumize” our products across our
trade distribution network. We sell our products in the premium category at our EBOs. This enables our
distributors in the trade distribution channel to assess the consumer demand for our products in the premium
category, which in turn leads to an enhanced offtake by such distributors. We also sell retail accessories such
as backpacks, caps and socks under our brand “CAMPUS? at the EBOs.
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