Cult.Fit has completed investor roadshows across key global financial centres and is targeting a mid-December listing, as the fitness company moves closer to its proposed initial public offering, according to people familiar with the developments who spoke to NDTV Profit.
The company is looking to file its updated draft red herring prospectus (UDRHP) by the end of November, with the final contours of the issue, including pricing and the offer-for-sale component, still being worked out. Cult.Fit received approval from the Securities and Exchange Board of India (SEBI) for its draft IPO papers on October 16.
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Investor meetings have been completed in London, Singapore, Hong Kong and Dubai, with the company also engaging investors in the US. Investor interest has been encouraging, particularly from domestic and international institutional funds, people familiar with the discussions told NDTV Profit.
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Cult.Fit is looking at an overall IPO size of around Rs.3,000-4,000 crore, with a fresh issue of approximately Rs.950 crore and an offer for sale (OFS) comprising around 17 crore shares. The final issue size, valuation and quantum of shares on offer remain subject to change, with pricing discussions and the anchor investor book yet to be finalised.
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The company is seeking to complete the listing process this year, although November is considered an aggressive timeline. December is the preferred window, with the possibility of a delay into January not being ruled out.
The IPO comes as Cult.Fit looks to strengthen its position in India's underpenetrated fitness market, while expanding beyond its established metropolitan markets. The company is actively evaluating tier-2 and tier-3 cities, including Chandigarh, Indore, Vijayawada, Coimbatore and Jaipur, as part of its next phase of expansion.
The company has developed a city-ranking model that evaluates population, purchasing power, economic activity, existing gym penetration and competitive presence to identify potential expansion markets.
Cult.Fit's growth strategy is centred equally on its two business verticals: fitness services, including gyms and fitness centres, and its products business, which includes performance apparel and equipment. While the services business is already profitable and provides the company's core cash flows, the products vertical is being positioned as a longer-term growth opportunity.
The company remains loss-making at the net-profit level, with management attributing the drag largely to the investments and costs associated with scaling the products business. It is working towards achieving positive EBITDA and subsequently net profitability.
Cult.Fit is also targeting younger consumers and expanding its lower-priced Cult Neo gym format, with annual memberships starting at around Rs.10,500 in Bengaluru.
The IPO is expected to provide an exit opportunity to some early investors who have been invested in the company for several years, while bringing in long-term institutional shareholders.
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