Baazar Style Retail IPO opens tomorrow: GMP, price, other details in 10 points

Baazar Style Retail IPO: Baazar Style Retail's initial public offering (IPO) will open for subscription on Friday, 30 August, and remain open until Tuesday, 3 September. The company aims to raise ₹834.68 crore from this book-built issue, which combines a fresh issue of 38 lakh shares for ₹148 crore and an offer for sale (OFS) of 1.8 crore shares for ₹686.68 crore.

The issue's book-running lead managers are Axis Capital, Intensive Fiscal Services Private Limited, and JM Financial Limited. Link Intime India Private Ltd is the issue's registrar.

Let's take a look at 10 key details of Baazar Style Retail IPO:

1. Baazar Style Retail IPO details

Baazar Style Retail IPO is a combination of a fresh issue of 38 lakh shares for ₹148 crore and an offer for sale (OFS) of 1.8 crore shares for ₹686.68 crore. The company aims to raise ₹834.68 crore from the issue.

2. Baazar Style Retail IPO key dates

The issue will open for subscription on Friday, 30 August, and remain open until Tuesday, 3 September. Share allotment is expected to be finalised on Wednesday, September 4, and the shares may debut on BSE and NSE on Friday, September 6.

3. Baazar Style Retail IPO price band, minimum lot size

The price band of Baazar Style Retail IPO has been fixed at ₹370 to ₹389 per share. The minimum lot size for an application is 38 shares, and the minimum investment required by retail investors is ₹14,782. Retail investors can submit bids for up to 13 lots, aggregating to ₹1,92,166.

4. What are the objectives of Baazar Style Retail IPO?

The company will use the net proceeds from the issue to prepay or repay all or a portion of certain outstanding borrowings. Some of the net proceeds will be used for general corporate purposes.

5. Business overview of Baazar Style Retail

According to the company's Red Herring Prospectus (RHP), it is a value fashion retailer in organised value retail markets in West Bengal and Odisha. It claims to have the largest retail footprint in eastern India when compared to the listed value retailers in FY24, citing the Technopak Report.

By the end of FY24, the company had 162 stores spread across over 1.47 million square feet and located in 146 cities. The majority of its stores are operated under the brand name ‘Style Bazaar’.

6. Industry Overview

India is expected to be in the top three global economies by FY30. GDP growth in India is expected to be driven by private consumption. Besides, more than half of India’s population is young, as it falls in the 15-49 years age group. Rapid urbanisation, growing middle class, and expectations of rising private consumption will augur well for the country's organised retail segment.

Organised retail penetration is expected to increase to nearly 22.9 per cent by FY27. Organised retail’s share of apparel has increased from nearly 14 per cent in FY07 to nearly 46 per cent in FY24, according to the company's RHP.

7. Financial performance of Baazar Style Retail

The company's standalone revenue from operations for FY22 stood at ₹5,511.18 million, which rose to ₹7,879.03 million in FY23. It reported a consolidated revenue from operations of ₹9,728.82 million for FY24.

The company's consolidated profit for the last financial year (FY24) stood at ₹219.42 million.

8. What are the key risks of Baazar Style Retail?

The company's stores are concentrated in the eastern parts of India. Any adverse developments in these states could negatively impact its operations. The company is a fashion retailer, and the fashion and retail industry are highly competitive.

The company does not have definitive or exclusive agreements with its third-party suppliers. Any disruptions on this front may adversely affect the business.

As per the RHP, the company follows a cluster-based expansion model, which results in the concentration of its business in a relatively small area.

9. Baazar Style Retail management

As per the RHP, the company has 10 directors, among which four are whole-time directors. There are six non-executive directors, out of which five are independent directors, including one woman independent director.

Rajendra Kumar Gupta and Sabita Agarwal are among the company's promoters. Pradeep Kumar Agarwal is the chairman and full-time director, and Shreyans Surana is the company's managing director.

10. What is the current GMP of Baazar Style Retail IPO?

According to market sources, the last grey market premium (GMP) of Baazar Style Retail IPO is ₹130. Considering the upper price band of the IPO at ₹389, the estimated listing price of Baazar Style Retail is ₹519, a premium of 33.42 per cent with respect to the issue price.

The GMP of an IPO indicates investors' positive views about the issue.

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