Shares of footwear brand Khadim India Ltd. fell over 8% on Monday after the company announced that is expecting to complete the demerger of its distribution business by March 2025 with a subsequent listing at the stock exchanges by May.
The Kolkata-based footwear maker had earlier announced the decision to carve out its distribution business and manufacturing activities into KSR Footwear Ltd. to improve margins and valuations.
"The demerger is pending before the NCLT. An order is expected by the end of this month or March. As of now, the planned effective date of the demerger is April 1. Listing of the demerged entity (KSR) will take place within May," Khadim's chief financial officer Indrajit Chaudhuri told news agency PTI.
"The company is also exploring quick commerce partnerships with platforms like Zepto for utility products such as school shoes and EVA slippers to boost sales," he added.
The company is expecting a margin expansion of 100-200 basis points for a full-year operation in financial year 2025-26. Khadim aims to expand its 4-5% online revenue share by optimising product selection and digital marketing.
Khadim is also set to launch an athleisure segment in the spring-summer season as part of its diversification strategy.
In the quarter ended Dec. 31, 2024, the company reported a 2.5% year-on-year revenue growth to Rs 160.2 crore.
The scrip fell as much as 8.96% to Rs 271.95 apiece on the NSE. The stock recovered slightly to trade 7.32% lower at Rs 276.85 apiece, as of 1:30 p.m. This compares to a 0.22% decline in the NSE Nifty 50.
The company's shares has fallen 23.42% in the last 12 months. The total traded volume so far in the day stood at 0.02 times its 30-day average, whereas the relative strength index was at 60.35.
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