The initial public offer of Go Fashion (India) Limited, which owns women's wear brand Go Colors, was subscribed 1.18 times within hours of opening for subscription on Wednesday.
The Rs 1,013.6-crore IPO received bids for 95,49,687 shares against 80,79,491 shares on offer, according to NSE data till 12:42 hours.
The category for retail individual investors (RIIs) received huge demand, getting subscribed 6.28 times and non-institutional investors received 14 per cent subscriptions.
The initial public offer has a fresh issue of up to Rs 125 crore and an offer for sale of up to 12,878,389 equity shares.
The price range for the offer is Rs 655-690 per share. The equity shares will be listed on the BSE and the NSE
The proceeds from the fresh issue will be used to fund the roll-out of 120 new exclusive brand outlets to support working capital requirements and general corporate purposes.
JM Financial, DAM Capital Advisors and ICICI Securities are the managers of the offer.
Go Fashion (India) Ltd on Tuesday raised a little over Rs 456 crore from anchor investors.
The company is engaged in the development, design, sourcing, marketing and retailing of a range of women's bottom-wear products under the brand 'Go Colors'.
Check what brokerage houses say:
It highlighted that the company can be hit by any kind of slowdown in consumer spending, inability to adapt to the rapidly changing consumer preferences, competition from other players and a build-up of inefficiencies in expanding and managing its retail network.
At a higher price band of Rs 690, GFIL is demanding an EV/sales multiple of 13.8x, which is at a premium to the peer average of 10.9x. Thus the issue seems to be fully priced.
The brokerage firm has assigned a “subscribe for long term” rating for the issue, stating that “the target market potential and the market share of GFIL in the niche category coupled with the largest network of exclusive brand outlets provides a huge potential to expand the business.
The brokerage recommends subscribing to the Go Fashion IPO for listing gains as well as for the long term.
The company has a mixed set of financials over the last three years, though the fall in revenue in FY21, following growth in the previous year, was on account of the pandemic, Swastika said in a note.
Go Colors has a strong brand value but fluctuating revenues, however, it is expected to have strong growth momentum with an increasing number of working women along with the evolving fashion trend.
The brokerage believes the IPO is attractively priced for investors. The IPO is arriving at a price to BV ratio of 13.65 based on the NAV of Rs 50.56, as of the first quarter of FY22.
Marwadi Financial Services
Considering trailing twelve months (TTM) sales of Rs 271 crore on a post-issue basis, the company is going to list at a market cap/sales of 13.73 with a market capitalisation of Rs 3,727 crore, while its peers' Page industries and Trent are trading at market cap/sales of 13.21 and 11.89, respectively.
The brokerage house assigns a “subscribe” rating to this IPO as it is available at a reasonable valuation compared to its peers.
(With PTI Inputs)