The public issue of Go Fashion, which owns the brand Go Colors, had been subscribed 135.46 times on Monday, the third and final day of bidding.
Investors put in bids for 109.44 crore equity shares against an offer size of 80.79 lakh units, as per the exchange data, reported Moneycontrol.
The initial public offer of Go Fashion India saw NIIs leading the subscription with over 200 times bidding.
Earlier, the initial public offer (IPO) of Go Fashion India was subscribed 6.87 times on the second day on Thursday. The company had fixed a price band of Rs 655-690 per share for this issue. An investor can bid for a minimum of 21 equity shares and in multiples thereof.
Check what analysts ate brokerages houses had said, according to to Zee Business.
Analysts at the brokerage firm have a bullish long-term view of Go Fashion. Although the brokerage firm said that the issue is priced at EV/Sales multiple of 13.8x, which is at a premium to peer average of 10.9x, analysts believe there is potential for Go Fashion to expand market share.
“We feel that it has the potential to expand the business and also almost fully recover the lost profitability due to the pandemic. Thus, we assign a “Subscribe for Long Term” rating for the issue,” they said.
Marwadi Financial Services
The brokerage firm highlighted that the company has a strong product portfolio and a multi-channel pan-India distribution network. Analysts said that considering TTM (June-2021) sales of Rs 271.4 crore on post issue basis, the company is going to list at Market cap/sales of 13.73 with the market cap of Rs 3,726 crore, while its peers namely Page industries and Trent are trading at market cap/sales of 13.21 and 11.89 respectively.
Although Go Fashion’s valuations are at a premium to peers, Angel One said that the company has a better track record of revenue growth. The brokerage firm said that the post-issue FY20 EV/EBITDA works out -30.2x to (at the upper end of the issue price band), which is almost in a similar range compared to its peers TCNS Clothing (FY20 EV/EBITDA -29.3x).
“Further, Go Fashion India has a better track record of revenue growth, higher operating margin & high Return on equity compared to TCNS Clothing Co. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue.” Angel One added.