Go Fashion IPOFirst Initial Public Offering (IPO) of go fashionGo Colours, owner of women’s bottomwear brand, is set to close today, Monday, November 22. The company has received good exposure from investors across the country for its maiden offering during the bidding process. The public offering, which was released last week, has already oversubscribed 6.87 times during the first two days of its bidding. So far, at the end of the second day of bidding, go fashion IPO As per the data available with the National Stock Exchange or NSE, bids have been received for 5,55,12,051 equity shares against a gross issue size of 80,79,491.
The issue is largely oversubscribed with support from retail investors. Retail buyers have bid for 3,61,93,920 shares against the issue amount of 24.64 times or 14,68,998 shares reserved for their category. Qualified institutional buyers bought 3.24 times the shares reserved for them, while non-institutional buyers bid for 2.30 times the shares earmarked for them.
Go Fashion IPO Key Details
The Go Fashion IPO, which opened from November 17 to 22, consists of fresh proceeds of Rs 888.60 crore and Offer for Sale (OFS) of Rs 125 crore. The price band for the initial public offer is Rs 655-690 per equity share. The Company will not receive any income from the OFS portion of the Offer.
The GoFashion IPO is divided between qualified institutional buyers, non-institutional buyers and retail buyers. Of this, up to 75 per cent of the shares are reserved for qualified institutional buyers or QIBs, while 15 per cent is set aside for non-institutional buyers. The remaining 10 per cent stake has been reserved for retail buyers.
The principal book running managers of the issue are JM Financial Limited, DAM Capital Advisors Limited and ICICI Securities Limited.
Through the OFS, the shareholders and promoters including PKS Family Trust and VKS Family Trust will give up their stake. They will sell 7.45 lakh equity shares each. Other entities selling their shares include investor Sequoia Capital. India Invest IV (74.98 lakh shares), India Advantage Fund S4 I (33.11 lakh shares), and Dynamic India Fund S4 US I (5.76 lakh shares).
Issue Objectives of Go Fashion IPO
The Rs 33.70 crore raised for the issue will be used to fund the opening of 120 new exclusive brand outlets of Go Fashion. It will also be used for working capital requirements (Rs 61.45 crore) and for general corporate purposes, the company said.
Should you subscribe to the Go Fashion IPO?
HEM Securities: The company is positioning the issue at a price band of 28x the EV/Ebitda multiple of Rs 655-690 per share on FY20 basis. Being a renowned women’s bottom-wear brand, the company has a well-diversified product portfolio with a multi-channel pan-India distribution network with a focus on EBO to enhance the brand’s visibility. We prefer the company’s efficient operating model with strong unit economics and wide procurement base along with highly efficient and technology driven supply chain management; That’s why we recommend “Subscribe” to this issue.
Angel Broking: In terms of valuation, post-issue FY20 EV/EBITDA works out to -30.2x (at the upper end of the issue price band) compared to its peers TCNS Clothing Company (FY20 EV/EBITDA -29.3x). Moreover, Go Fashion India has a better track record of revenue growth, higher operating margin and higher return on equity as compared to TCNS Clothing Company. Taking into account all the positive factors, we believe this assessment is at an appropriate level. As such, we recommend a subscription rating on this issue.
read all breaking news, breaking news And coronavirus news Here. follow us on Facebook, Twitter And Wire,
,