The excitement around Go Fashion IPO is making money for shareholders of TCNS Clothing too
- One of the largest women's bottom-wear brands in India under brand Go Colors, Go Fashion has opened its IPO today.
- The IPO is in strong demand among investors given its grey market premium has reached ₹555 per share.
- Shares of TCNS Clothing have gained 8% today, and cumulatively 32% in the last 30 days.
AdvertisementThe initial public offering (IPO) of Go Fashion has already been fully subscribed in the first two hours since it opened , The grey market premium has more than doubled to ₹555 per share — compared to the IPO price range of ₹655- ₹690 — in the last couple of days.
The excitement around Go Fashion’s IPO is visible even in its peer stocks like TCNS Clothing, which has rallied 8% today, and 10% in the last five days. Go Fashion is engaged in the development, design, sourcing, marketing and retailing a range of women's bottom-wear products under the brand, 'Go Colors'. TCNS offers women’s top-wear, bottom-wear, drapes, combination sets and accessories under three major brands W, Aurelia & Wishful W.
Analysts are, however, bullish on the prospects for Go Fashion. “It has acted as a “category creator” for bottom-wear and has levered its first mover advantage to create a direct-to-consumer brand with a diversified and differentiated range of premium products at competitive prices, from Rs225 to Rs1,599,” said Anand Rathi in a report.
Women’s bottom-wear is the fastest-growing category in the women’s apparel segment, and is expected to grow to ₹243 billion by FY25, from ₹135 billion in FY20, says Reliance Securities.
However, TCNS makes 2.5 times the revenue compared to Go Fashion. Both companies have clocked a loss last year due to the shutdowns triggered by the COVID-19 pandemic.
The report from Swastika said, “Go Colors has a strong brand value but has fluctuating revenues and the company moved into losses in FY21 but as the number of working women is increasing along with the evolving fashion trend it is expected that the company has strong growth momentum.”
|Peers||Net sales FY21||Net profit FY21||Market cap|
|Aditya Birla Fashion & Retail||₹5,181 crore||-₹649 crore||₹2.69 lakh crore|
|Page Industries||₹2,833 crore||₹340 crore||₹45,887 crore|
|Trent||₹2,593 crore||-₹146 crore||₹41,666 crore|
|Bata India||₹1,708 crore||-₹89 crore||₹28,276 crore|
|TCNS Clothing||₹635 crore||-₹56 crore||₹5,577 crore|
|Go Fashion||₹250 crore||-₹3.5 crore||₹3,730 crore (implied market cap according to Reliance Securities)|
Another exciting fact about Go Fashion company is its profitable and scalable exclusive brand outlet (EBO) model.
Go Colors had one of the highest sales per sq.ft. in EBOs among key women’s apparel companies in FY21.
|Brand||Sales per square foot|
|Go Colors||₹12,000 - 40,000|
|Aurelia||₹6,000 - 9,000|
|BIBA||₹8,500 - 12,500|
|Fabindia||₹10,500 - 15,000|
|Soch||₹6,500 - 16,500|
|W||₹7,000 - 10,500|
|Zara||₹20,000 - 40,500|
These are the some of the details of the Go Fashion IPO for those who are interested in applying:
|Price band||₹655 to ₹690|
|IPO open date||November 17|
|IPO close date||November 22|
|Allotment date||November 25|
|Initiation of refunds||November 26|
|Credit of shares to demat account||November 29|
|IPO listing date||November 30|
|Issue Size||₹1,014 crore|
|Fresh issue||₹125 crore|
|Offer for sale||1.28 crore shares|
While Go Fashion is in line with the industry trend of reporting losses in FY21 on account covid impact on sales operations, analysts see meaningful growth prospects in the women apparel space with increasing female working population.
AdvertisementGo Fashion’s future expansion plans and good market share in branded women’s bottom wear has urged brokerage firms to recommend a subscribe rating on the stock.
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