Stanley Lifestyles Limited (SLL) IPO: Get Date, Price, Review and Details

About the Company:

Stanley Lifestyles Limited (SLL) is one of India’s leading super-premium and luxury furniture brands, recognized for its extensive manufacturing and retail operations. In Fiscal 2023, SLL ranked as the fourth largest player in India’s home furniture segment by revenue. The company is a pioneer among Indian firms in the super-premium and luxury furniture market, offering products across super-premium, luxury, and ultra-luxury price points through its various brands. SLL designs and manufactures a range of high-end furniture, including seating options like sofas and dining chairs, cased goods such as dining tables and consoles, kitchens, cabinetry products, and beds and mattresses, all under the “Stanley” brand. Over the years, SLL has built strong brand recognition and customer loyalty by consistently delivering quality products and employing targeted marketing strategies. Their advertising campaigns, including “Beautiful Living”, “Design Glamour”, “Luxury Unlimited”, and “Bed of Dreams”, have effectively promoted their brand. SLL believes in the power of customer advocacy, with satisfied customers serving as ambassadors who generate word-of-mouth publicity through testimonials and endorsements. This approach has significantly contributed to the brand’s reputation and growth in the competitive luxury furniture market.

IPO Details:

The Objectives of the Fresh Issue:

The company intends to utilize the net proceeds from the fresh issue towards funding the following objects:

• Expenditure for opening new stores under the formats of “Stanley Level Next”, “Stanley Boutique”, and “Sofas & More by Stanley” (“New Stores”);
• Expenditure for opening anchor stores;
• Expenditure for the renovation of existing stores under the formats of “Stanley Level Next”, “Stanley Boutique” and “Sofas & More by Stanley” (“Existing Stores”);
• Funding the capital expenditure requirements for purchasing new machinery and equipment by the company and Material Subsidiary, SOSL; and
• General corporate purposes.

Key Strengths and Opportunities:

• Stanley Lifestyles Limited is one of the few vertically integrated furniture manufacturers, operating two facilities in Bengaluru, Karnataka. The company produces furniture for every room and sells through its network of Company Owned Company Operated (COCO) and Franchise Owned Franchise Operated (FOFO) stores. This integrated model allows Stanley Lifestyles to control the entire process, from raw material procurement to design, production, marketing, and retail.
• Luxury and super-premium furniture manufacturing is highly reliant on skilled artisans and craftsmen due to its labor-intensive nature. As of December 31, 2023, the new product development division employed 58 craftsmen, both permanent employees and employees on a contractual basis. These experts enable the company to create products with intricate detailing and artistic flair. Every step, from initial design to precise leather cutting and stitching, is meticulously executed in-house by these craftsmen.
• The growing demand for housing, interior design services, furnished options, renovations, and evolving housing trends is driving the expansion of the furniture market. This market growth caters to the furnishing needs of the real estate sector. The company is one of the few home-grown luxury furniture brands well-positioned to capitalize on the emerging premiumization of the Indian housing market.

Risks:

• The brand name “Stanley” is registered under one of Stanley Lifestyles Limited's (SLL) Promoters. An Assignment Deed has been signed with the promoter, but the trademarks are not yet registered in the company’s name. Additionally, the promoter has a co-existence agreement with Stanley Furniture Company, Inc. to limit the use of the term “Stanley” as a trademark in a composite manner for products. If the intellectual property rights assigned to SLL under the Assignment Deeds are not registered promptly or if there is a breach or termination of the co-existence agreement, it could negatively impact the company’s business operations.
• The company’s business is highly dependent on the sale of sofas and recliners. For Fiscal 2023 and the nine months ended December 31, 2023, more than 50% of the company’s revenues are derived from the sale of sofas and recliners. Variations in demand and changes in consumer preference for sofa and recliner products could have an adverse effect on the revenues and business of the company.
• Over 75% of the company’s revenues are generated from the stores in southern regions of India namely, Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, and Telangana. Any adverse developments affecting the operations in these regions could adversely impact the company’s operations.

Financial Snapshot:

Conclusion:

Stanley Lifestyles Limited comes at an earnings valuation of 58x based on its EPS as of March 31, 2023, and the upper price band. There are no listed companies in India with whom Stanley’s business model can be directly compared that matches the size and scale of its business operations. Considering the robust financials, future growth prospects, and risks associated with the company, we advise the investors to consider subscribing to this IPO solely for listing gains.