November 18, 2021 04:26 PM
Go Fashion India Limited is set to open its maiden initial public offer, or IPO, on Wednesday, November 17. The RS 1,013 crore IPO will be open for six days instead of the usual three days, since November 19 is a national holiday. The Go Fashion IPO will close on November 22.
The company, which owns Go Colors, is engaged in the development, design, sourcing, marketing and retailing of a range of women’s bottom-wear products under the brand, ‘Go Colors’. The company has already mopped up RS 56.12 crore from 33 anchor investors, and now 66,10,492 shares will be up for bidding.
The top anchor investors include Government of Singapore, Monetary Authority of Singapore, Nomura, Abu Dhabi Investment Authority, Fidelity, Neuberger Berman Emerging Markets Equity Master Fund, University of Notre Dame Du LAC, and Volrado Venture Partners Fund II
Go Fashion IPO Details
The Go Fashion IPO, open between November 17 to 22, comprises of fresh proceeds worth RS 888.60 crore and an offer for sale (OFS) worth RS 125 crore. The price band for the initial public offer is RS 655-690 per equity share. The company will not receive any proceeds from the OFS part of the offer.
The lot size of the maiden public bid has been fixed at 21 equity shares and in multiples of 21 shares thereof. This means that retail investors can invest a minimum of RS 14,490 per lot in the IPO. The maximum price of one lot can go up to RS 1,88,370 for 13 lots. Retail investors can invest up to RS 2 lakh in the initial public offer.
Go Fashion IPO has been divided among qualified institutional buyers, non-institutional buyers and retail buyers. Of this, up to 75 per cent of the shares have been reserved for qualified institutional buyers or QIBs while 15 per cent has been set aside for non-institutional buyers. The remaining 10 per cent stakes have been reserved for non-institutional buyers.
Go Fashion IPO Key Strengths
According to Choose Broking, Go Fashion India has a well-diversified product
portfolio and is a multi-channel pan-India distribution network with a focus on Exclusive brand outlets, enhancing brand visibility. It has strong unit economics with an efficient operating model, and has an in-house expertise in developing and designing products. All these qualities will ensure profit in the company.
Go Fashion IPO GMP Today
The Go Fashion shares were fetching a grey market premium of RS 555 on Tuesday, November 16. This was up by 150.72 per cent over the upper price band of RS 690 per share as fixed by the company. This means that the shares would list at around RS 1,245 at the grey market. The high GMP indicated strong listing for Go Fashion shares on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) later this month.
Should You Subscribe?
Reliance Securities: The IPO is valued at 14.6x FY21 EV-to-sales, which looks to be at par with Trent, but at a significant premium to Aditya Birla Fashion & Retail (ABFRL). Trent and ABFRL are considered to be superior to GFL in most parameters.
However, the share of organized retailing within women’s apparel has increased from 19 per cent in FY15 to 27 per cent in FY20, and is expected to reach 42 per cent by FY25E, mainly due to the growing female population, increasing number of working women, evolving fashion trends, and rising spending power of consumers.
In particular, women’s bottom-wear is the fastest-growing category in the women’s apparel segment, and is expected to grow to RS 243 billion in FY25E, from RS 135 billion in FY20. This offers healthy growth visibility to GFL in the long run.