Go Fashion IPO: The IPO of Go Fashion, the parent company of women’s wear brand Go Colors, has received an overwhelming response from retail investors. Under this IPO of Rs 1014 crore, the share reserved for retail investors has been subscribed the most, about 24.64 times. The IPO opened on November 17 and so far qualified institutional buyers, net institutional investors and retail investors have subscribed 6.87 times to this IPO. Most of the brokerage firms have given it a subscribe rating.
Talking about the gray market, after the opening of the IPO, its gray market premium (GMP) had reached Rs 600 but after that it started declining and it has fallen to Rs 460. However, despite this the company’s expansion plan and strong market share in women’s branded bottom wear is making it attractive for investment by market experts. The price band for this IPO is fixed at Rs 655-690 per share.
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This is the opinion of experts regarding investment
- According to Reliance Securities, the IPO is priced at 14.6 times the enterprise value of FY21 sales, which is at par with Trent but at a premium to Aditya Birla Fashion & Retail. Trent and Aditya Birla Fashion & Retail are stronger than Go Fashion but organized retailing of women’s clothing grew from 19 per cent in FY15 to 27 per cent in FY20 and is now projected to reach 42 per cent by FY2025 Is. In the case of women’s clothing, the sales of bottom wear is growing rapidly, which is estimated to increase from Rs 1.35 thousand crore in FY 2020 to Rs 2.43 thousand crore by FY 2025. In such a situation, analysts of Reliance Securities have advised to subscribe to this IPO in view of the growth potential of Go Fashion.
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- Go Fashion (India) is one of the largest brands in the country selling women’s bottom wear. It had an 8 per cent share in the branded women’s bottom wear market in FY20. Go Fashion, one of the leading players in terms of high gross margins and revenue per square foot in the overall industry, has a good potential to grow the capital invested. In such a situation, according to Sanctum Wealth Director (Research) Ashish Chaturmohta, investors can get great returns by investing in Go Fashion IPO for the long term.
Go Fashion IPO Details
- Today is the last chance to subscribe to Go Fashion India’s Rs 1014 crore IPO.
- Under this issue, new shares worth Rs 125 crore will be issued and 1.29 crore equity shares will be sold under OFS. Under the OFS, PKS Family Trust and VKS Family Trust will sell 7.45 lakh equity shares, Sequoia Capital India Investments 74.98 lakh, India Advantage Fund S4 33.11 lakh and Dynamic India S4 US 5.76 lakh equity shares.
- The price band for this issue has been fixed at Rs 655-690 per share. The face value per share is Rs 10.
- Investors can invest in lots of 21 shares in this IPO i.e. according to the upper price of the price band, investors will have to invest at least Rs 14490.
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- The allotment of shares may be finalized on November 25, while the listing may take place on November 30.
- 75 per cent of the issue is reserved for Qualified Institutional Buyers (QIBs), 15 per cent for non-institutional investors and 10 per cent for retail investors.
- The money raised by issuing new shares will be used to open 120 new exclusive brand outlets. Apart from this, it will also be used for working capital requirements and general corporate purposes.
- JM Financial, DM Capital Advisors (formerly IDFC Securities) and ICICI Securities are the lead managers of the issue.
- The registrar for the issue is Keffin Technologies.
Details about the company
- Go Fashion India develops, designs and then assembles, markets and then sells a wide range of women’s bottom-wear products under the GoColors brand. It is one of the largest brand selling women’s bottom wear in the country.
- It is one of the few clothing companies in the country that recognized the business opportunity in women’s bottomwear and acted as a category creator for bottom-wear.
- Go Fashion (India) is one of the largest brands in the country selling women’s bottom wear. It had an 8 per cent share in the branded women’s bottom wear market in FY20.
- Talking about its bottom-wear products, it sells churidars, leggings, dhoti, harem pants, patiala, palazzo, pants, trousers and jeggings etc. It offers options in ethnic wear, western wear, fusion wear, athleisure, denims and plus sizes.
- Talking about the financial condition of the company, it had suffered a loss in the last financial year due to Corona, but its profit increased in the last two financial years. In the financial year 2019, the company had a net profit (Profit After Tax) of Rs 30.94 crore, which increased to Rs 52.63 crore in the next financial year 2019-20. In the last financial year 2020-21, the business of the company was affected due to Corona and it suffered a loss of Rs 3.54 crore.