The Hindu Business Line : Royal Classic plans IPO

Mr R. Sivaram, Executive Director, Royal Classic Group, said the IPO is to fund the company's plans for distribution in the domestic market. Currently, the company exports 50 per cent of its turnover to mega brands in developed markets. He said the company would go public after it achieves a turnover of Rs 500 crore.

The company has entered the Rs 2,500-crore innerwear segment with the launch of Smash, a T-shirt brand that the company acquired in September 2004. The launch is supported by a Rs 4 crore advertising blitz, of which Rs 1 crore has been spent.

Smash has been in the market for six months and has been rolled out in Bangalore, Hyderabad, Kochi and now in Chennai, he said.

The product prices range from Rs 47 to Rs 150 per piece for briefs and boxers. The vest is priced between Rs 35 and Rs 85 per piece, while the gym tees, boxer shorts, and body huggers will be priced between Rs 220 and Rs 450 per piece.

The company plans to launch Smash in two phases, starting with the South and extending to the rest of the country in a phased manner. Mr Sivaram said the company is targeting a turnover of about Rs 10 crore for Smash, which should be a Rs 100-crore brand by 2008.

The company's other brand, Classic Polo, has a market share of 25 per cent. At present, there are 14 exclusive Classic Polo stores, which will go up to 25 by the end of March 2005.

The company has attempted to position Smash as an innerwear and active wear brand while Classic Polo is a mid-segment lifestyle men's brand, he said.

The company is fully integrated with about 10,000 acres under cotton through contract farming, is into cotton ginning, spinning, knitting, processing and garmenting. The total installed daily capacity is 25,000 undergarments, 15,000 T-shirts, 20,000 infant and kids wear, 1,000 shirts and 400 trousers, he said.