Taking advantage of the niche market selling sports shoes for less than 10 USD to compete with Nike and Adidas, the Indian shoe manufacturer becomes a billionaire
Hari Krishan Agarwal launched “Campus” sneakers in 2005.
Campus Activewear, which sells more shoes than Nike and Adidas in India, has had a successful IPO.
After a volatile week for the stock market, India has added a new billionaire. Hari Krishan Agarwal, 66, founder of Delhi-based Campus Activewear, has joined the billionaires club following the successful IPO of his sports shoe company. Campus Activewear shares are listed at 23% above the IPO price. Agarwal’s 74% stake in the company is now worth about $1 billion.
India’s $9 billion footwear industry has created three billionaires in recent years. Two brothers living in Delhi, Mukand Lal Dua and Ramesh Kumar Dua, run a $350 million company Relaxo Footwear (in revenue), which sells everything from casual sandals to expensive shoes; and Rafique Malik, who brought Mumbai-based Metro Brands to the public for the first time, valued at $107 million last December. (Even though Metro’s value when listed fell 13%).
Agarwal started his career in 1983 when he founded the sports shoe brand “Action”. In 2005, he released “Campus” sneakers for under $10. Reasonable pricing has helped Campus make strides big enough to compete with global brands like Nike, Adidas and Puma, with sneakers priced at $35 or more.
Campus’s chief financial officer Raman Chawla said: “He took advantage of the huge ‘gap’ in the Indian sports shoe market – in the $10 to $40 price range.” According to an April 2022 report by Gurgaon consulting firm Technopak for the financial year 2021, Campus is India’s largest player in the field of branded sports and athleisure sports (combination of the sports segment). “sports” and “leisure”), both in terms of shoe value and quantity. The company holds 17% market share by value and nearly 25% by volume.
Agarwal with his son – Nikhil Aggarwal
Campus sold 13 million pairs in 2021, generating sales of $94 million. This is down slightly from the previous year’s $95 million in revenue due to the impact of the Covid-19 pandemic, but revenue is growing again: Campus recorded $111 million in revenue for the nine months ending December 2021. .
Analysts expect the local Campus brand to benefit further as athletic footwear is the fastest growing segment in the footwear sector. And they think the demand for such shoes is “ready” to continue to grow.
According to Technopak, per capita spending on sports and leisure products in India is just $1.9 compared to $33.8 in China and $227.3 in the US.
This growth potential has “attracted” private equity firm TPG and billionaire Anil Rai Gupta, who controls electronics maker Havells. They invested in Campus in 2018 and continue to hold shares of 7.6% and 2% respectively, even after selling some of their shares in the IPO.
Sneha Poddar, research analyst at Motilal Oswal, an investor in Mumbai, said: “Athleisure is a relatively new niche. The company is also expanding into new markets. “. The Campus’s main market consists of smaller cities in northern and eastern India, but now the Campus is working on expanding into larger supermarkets and laying the groundwork for the brand to expand throughout India. In addition, the company is also expanding its product range from sneakers to casual shoes, says Poddar.
Even though it’s listed, Campus is still a family business. Agarwal’s son Nikhil Aggarwal, 37, an industrial engineer from Purdue University, started at Campus in 2008 and became CEO nine years later. Prerna, Nikhil’s wife, is the marketing director.
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