Go Fashion IPO of ₹1013 crore will open for subscription on November 17. It is mainly an OFS and some fresh issue of equity shares. The offer for sale is by PKS Family Trust, Sequoia Capital India Investments IV, India Advantage Fund S4, Dynamic India Fund. Chennai based Go Fashion (India) is largest women’s bottom-wear brand in India. it goes to the credit of Go Fashion (India) Ltd. that it identified the market opportunity in women’s bottom wear and has acted as a ‘category creator’ for bottom wear brand Go Colors.
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Go Fashions IPO Details:
| Issue Period | 17th – 22nd November, 2021 |
| Issue Details | Fresh Issue ₹ 125 Cr |
| + OFS 12,878,389 Equity Shares ~Rs 888.61 Crores | |
| Issue Size (₹ Cr) | ₹ 969 – 1,014 Cr |
| Bid Lot | 21 shares |
| FV per share | 10/- |
| Price Band | ₹ 655 – 690 |
| Issue Structure : | |
| QIB | 75% of the offer |
| NIB | 15% of the offer (152 Cr) |
| Retail | 10% ( 1,469K Shares, 101 Cr) |
| Appl for 1x retail | ~0.7 Lacs |
Updates :
- ANCHOR ISSUE: Ahead of its IPO, Go Fashions raised Rs 455 crore from 35 anchor investors . The investors include names like Government of Singapore, Abu Dhabi Investment Trust, Nomura, SBI MF and Axis MF etc. tors given allotment in the anchor category.m\ Further hot of mutual funds like ICICI Prudential Mutual Fund (MF),AXIS MF, Mirae, SBI MF etc. also participated in the anchor book.
Go Fashions IPO Review | Go Colors IPO Review: Video Presentation
About Go Fashions (India)
- Go Fashions is engaged in the development, design, sourcing, marketing and retailing of a range of women’s bottom-wear products under the brand, ‘Go Colors’.
- Go Fashion (India) Limited was established in 2011. It was first brand to specialize in women’s bottom-wear
- The company has 450 exclusive brand outlets (EBOs) across 23 states and union territories in India.
- Company’s distribution channels include large format stores (LFSs) including Reliance Retail, Central, Unlimited, Globus Stores, Spencer’s Retail etc.
- In fy21, Sales through LFSs, franchisees, MBOs and online retailers, represented 22%, 1.31%, 2.86% and 4.76%, respectively, of its revenues.
- Products cater to women across all age groups and girls and fits that are suitable to various body types and physiques.
- It Offers a wide range of bottom wear in terms of colors and styles to go with any top, all available under the same roof.
- Has over 50 legwear styles in over 120 colors from ethnic to western and fusion wear
Go Fashions IPO: Financials
| Particulars / (₹ In Cr) | Jun 21 (3m) | Jun 20 (3m) | 2021(12) | 2020(12) | 2019(12) |
| Revenue from Operations | 31 | 10.31 | 250.67 | 392.01 | 285.25 |
| Revenue Growth (%) | 200.68% | – | -36.06% | 37.43% | – |
| EBITDA | -5.92 | -15.21 | 46.35 | 126.51 | 79.99 |
| EBITDA (%) | -19.10% | -147.58% | 18.49% | 32.27% | 28.04% |
| Profit/Loss Before Tax | -18.37 | -24.52 | -3.14 | 68.29 | 42.21 |
| Net Profit | -19 | -8.6 | -3.54 | 52.63 | 30.94 |
| EPS (₹) | (3.64)^ | (1.65)^ | -0.68 | 10.08 | 5.93 |
| Eq Share Capital | 30 | 30 | 30 | 30 | 30 |
| Net worth as stated | 263.9 | 277.71 | 282.94 | 286.3 | 228.33 |
| Post IPO Equity | 54.01 | ||||
| FV | 10 | ||||
| IPO Price | 690 | ||||
| EPS ( based on Fy20) | 9.74 | ||||
| PE( based on Fy20) | 70.81 | ||||
| Market Cap | 3727 | ||||
| Market Cap / Sales | 14.9 |
Salient Points
- Go Fashion has a market share of approximately 8% in the branded women’s bottom-wear market in Fiscal 2020.
- To open 120 new stores with IPO Proceeds
- Go Fashion plans to launch about 2000 exclusive brand outlets in the country in the 6-7 years.
- Extensive as well as automated procurement & supply chain. extensive sourcing network and the manufacturing network through 73 suppliers and 42 job-workers spread across 11 states and union territories, as of September 30, 2021.
- Company has a pan-India network of EBOs across 23 states and union territories in India as of May 31, 2021.
- 69.33% of its stores in West & South.
- Promoters Sarogi family holding will come down from present 57.5% to ~52.8% post the IPO.
Cons
- The current and continuing impact of the ongoing COVID-19 pandemic on its business and operations has been significant.
- Challenges due to changes in fashion trends and changing customer preferences
- Brand names are applied for, but are pending registration under the Trade Marks Act, 1999.
- Completion from unorganized sector.
- It has incurred loss for FY21
Go Fashions IPO: Assessment
- The share of organized retailing within women’s apparel has increased from 19% in 2015 to 27% in 2020 and is expected to reach 42% by 2025.
- A growing working female evolving fashion trends, rising spending power.
- Women’s bottom-wear is the fastest growing category in the women’s apparel segment market and is expected to grow at a CAGR of 12.35% to reach ₹ 24,315 crore by 2025. With in this the share of organized sector expected to garner share of 38% with a CAGR of 24.3% until 2025.
- To benefit from shift from unorganized to Organized, Brand to unbranded.
- The brand has been present in various retail locations for ten years, focusing on EBOs, which has helped it build brand equity and connect with consumers.
- With its B&M (Brick & Mortar) presence, its own website, and existence on marketplaces as well as sector experts, the brand has taken a multi-channel strategy to boost growth.
- The company has suffered due to the pandemic and posted negative earnings for the last 15 months.
- Backing of PE investors. •Credit Rating: [ICRA]A-(Stable)/[ICRA]A2+ assigned
- The GMP of Go Fashions IPO in grey market was reported around Rs. 325+ on 14 Nov 21 & thereafter jumped to Rs. 500 on 16-11-21.
- Listing Gains in IPOs are more a function of operator interest and market sentiments at the time of listing.
- This is more true for company there are lot more expectations but Prices cannot be justified by existing revenues or bottomline.
- Even as valuations are not cheap, barring any last minute development, I intend to apply in Go Fashions IPO. The IPO Looks attractive to me.
- Due to current Frenzy for IPOs, with 10% retail, Allotment is rather difficult in Go Fashions IPO..
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.