Baazar Style Retail, a prominent fashion retailer with a strong presence in West Bengal and Odisha, is set to launch its Initial Public Offering (IPO) with an issue size of ₹834.68 crores. This IPO is a combination of a fresh issue of 0.38 crore shares amounting to ₹148.00 crores and an offer for sale (OFS) of 1.77 crore shares aggregating to ₹686.68 crores.
The Baazar Style Retail IPO opens for subscription on August 30, 2024, and closes on September 3, 2024. The allotment of shares is expected to be finalized on September 4, 2024, with the listing date tentatively set for September 6, 2024, on the BSE and NSE.
The price band for the IPO is set at ₹370 to ₹389 per share. Investors can bid for a minimum of 38 shares, translating to a minimum investment of ₹14,782. High Net-Worth Individuals (HNIs) can invest in two categories: Small NII (sNII) with a minimum of 14 lots (532 shares) requiring an investment of ₹206,948, and Big NII (bNII) with a minimum of 68 lots (2,584 shares) requiring ₹1,005,176.
Additionally, there is a reservation of up to 28,248 shares for employees, offered at a discount of ₹35 per share.
Axis Capital Limited, Intensive Fiscal Services Private Limited, and JM Financial Limited are the book running lead managers for this IPO. Link Intime India Private Ltd has been appointed as the registrar.
Before the IPO, Baazar Style Retail has a shareholding of 70,810,966 shares, which is expected to increase to 74,615,593 shares post-IPO.
The IPO comprises 2,14,59,488 shares, divided among different investor categories:
Notably, the IPO raised ₹250.10 crores from anchor investors on August 29, 2024, with the anchor lock-in period ending on October 4, 2024, for 50% of the shares, and December 3, 2024, for the remaining shares.
Incorporated in June 2013, Baazar Style Retail Limited operates as a fashion retailer, offering a wide range of apparel for men, women, boys, girls, and infants, as well as general merchandise like non-apparels and home furnishings. The company aims to provide a family-oriented shopping experience with a focus on quality products at affordable prices.
As of March 31, 2024, Baazar Style Retail operates 162 stores across 9 states, including Odisha, Bihar, Assam, Jharkhand, Andhra Pradesh, Uttar Pradesh, Tripura, and Chhattisgarh. The average store size is 9,046 square feet, and the company employs a trained staff to enhance the customer experience.
Financially, the company reported assets of ₹1,165.97 crores, revenue of ₹982.83 crores, and a profit after tax of ₹21.94 crores as of March 31, 2024. The company’s market capitalization is estimated at ₹2,902.55 crores. Key financial indicators include a Return on Equity (ROE) of 10.74%, Return on Capital Employed (ROCE) of 18.39%, and a Debt-to-Equity ratio of 0.76. The company's Earnings Per Share (EPS) is 3.1 pre-IPO, and 2.94 post-IPO, with a Price-to-Earnings (P/E) ratio of 125.54x and 132.28x, respectively.
The company plans to use the net proceeds from the IPO for the following purposes:
While Baazar Style Retail has shown growth in recent years, particularly after recovering from the impact of the COVID-19 pandemic, some analysts have expressed concerns over the IPO’s pricing. Based on FY24 earnings, the issue appears to be highly priced, which has led to mixed recommendations, with some advising potential investors to avoid this IPO due to its valuation.
As of Day 1, the IPO was subscribed 0.41 times, with the retail category seeing the highest subscription at 0.66 times, followed by the employee category at 5.28 times. The QIB category had minimal activity with a 0.00 subscription rate.
The Baazar Style Retail IPO presents an opportunity to invest in a growing fashion retailer with a strong presence in Eastern India. However, the high valuation and mixed reviews from analysts suggest a cautious approach. Investors should carefully evaluate their investment objectives and risk tolerance before subscribing to this IPO.
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