The initial public offering, or IPO, of Go Fashion is set to open on Wednesday, November 17. The issue, which comes amid a continued interest among companies to open up for subscription to the public, will continue till November 22, which is next Monday. The bidding for anchor investors is set to open Monday, on November 16, the company said in a virtual briefing. The Go Fashion IPO will be open for six days, instead of the usual three days, since November 19 is a national holiday. Go Fashion is the owner of popular women’s bottomwear brand, Go Colors, offering one of the widest portfolios of products in the category.
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. At the upper end of the price band, Go Fashion expects its IPO to raise Rs 1,013.6 crore.
Through the OFS, shareholders and promoters including PKS Family Trust, and VKS Family Trust will let go of their stakes. They will offload 7.45 lakh equity shares each. The other entities selling their shares include investors Sequoia Capital India Investments 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).
Go Fashion IPO Reserved Portion, Lot Size
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.
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.
Issue Objectives of Go Fashion IPO
An amount of Rs 33.70 crore raised for the issue will be be used for funding the roll out of 120 new exclusive brand outlets of Go Fashion. It will also be used to working capital requirements (Rs 61.45 crore) and for general corporate purposes, said the company.
Go Fashion IPO GMP Today
The Go Fashion shares were fetching a grey market premium of Rs 350 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. 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 to Go Fashion IPO?
Angel Broking: In terms of valuations, the post-issue FY20 EV/EBITDA works out -30.2x to (at the upper end of the issue price band), which is almost in similar range compared to its peers TCNS Clothing Co. (FY20 EV/EBITDA -29.3x). Further, Go Fashion India has better track record of revenue growth, higher operating margin & high Return on equity compared to TCNS Clothing Co. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue.
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