Baazar Style Retail IPO: Key Details, Subscription Status, and Expert Analysis
Baazar Style Retail, a value fashion retailer supported by Rekha Jhunjhunwala, is launching its Initial Public Offering (IPO) on August 30, 2024. The company aims to raise ₹250 crores from anchor investors. The IPO will be open for subscription until September 3, 2024, with shares priced between ₹370 and ₹389 each.
Baazar Style Retail IPO Overview
The Baazar Style Retail IPO marks a significant milestone for the company, which is known for offering affordable and quality apparel and general merchandise. On August 29, Baazar Style Retail secured ₹250 crores from anchor investors, setting the stage for its public offering. Earlier this month, the company raised ₹37 crore in a pre-IPO placement round from Volrado Ventures Partners Fund II. This funding resulted in a reduction in the size of the fresh issue.
The IPO will close on September 3, 2024, and shares are priced between ₹370 and ₹389 each. Investors can bid for a minimum of 38 shares per lot, with additional shares available in multiples of 38. The Baazar Style Retail IPO is being conducted through a book-building process. Allocation of shares is set at 75% for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors.
For retail investors, up to 35% of the shares are allocated, while 50% is reserved for QIBs and 15% for NIIs. Employees participating in the reserved portion will receive a ₹35 per share discount. Baazar Style Retail, founded in June 2013, operates in West Bengal and Odisha, providing a diverse range of clothing and household items. Its listed peers include V-Mart Retail Ltd and V2 Retail Ltd, with a P/E ratio of 138.88.
Baazar Style Retail IPO Subscription Status
As of the first day of the Baazar Style Retail IPO, the issue has been subscribed 26%, according to BSE data as of 12:33 IST. The IPO received bids for 39,12,518 shares against the 1,50,30,116 shares on offer. The retail investor portion stands at 43% subscribed, while the non-institutional investor quota is 18% subscribed. The portion allocated for qualified institutional buyers (QIBs) remains to be fully subscribed, and the employee portion has been oversubscribed 3.63 times.
Expert Reviews on Baazar Style Retail IPO
Deven Choksey Research
Deven Choksey Research regards Baazar Style Retail as a prominent value fashion retailer in Eastern India. The company reported sales of ₹972.9 crore for FY2024, demonstrating a strong 32.86% compound annual growth rate (CAGR) from FY2022 to FY2024. Additionally, Baazar Style Retail improved its return on equity (ROE) and return on capital employed (ROCE) to 11% and 18%, respectively, in FY24. The company’s effective cluster-based expansion strategy has been successful, with a notable 64.57% CAGR in private label offerings. Baazar Style Retail’s investments in supply chain optimization and operational improvements enhance its position within the expanding Indian retail market. Given these positive factors, Choksey Research rates the Baazar Style Retail IPO as “SUBSCRIBE.”
StoxBox
StoxBox Research Analyst Akriti Mehrotra highlights the significant growth of Baazar Style Retail, noting the expansion to 162 stores across nine states with a CAGR of 35.8% from 2017 to 2024. The company’s recovery post-pandemic and its cluster-based expansion strategy have boosted sales from ₹787.9 crore in FY23 to ₹972.9 crore in FY24, with approximately 38% of revenue coming from private labels. The company plans to use IPO proceeds to repay its ₹178.2 crore debt. Despite a premium valuation based on a P/E ratio of 124x at the upper price band, Mehrotra recommends a “SUBSCRIBE” rating due to Baazar Style Retail’s growth prospects and strategic goals.
IPO Financials and Use of Proceeds
The Baazar Style Retail IPO includes a fresh issue of ₹148 crore and an offer for sale (OFS) of up to 17.65 million shares by current shareholders and promoters, totaling ₹687 crore at the upper price band. The total issue size amounts to ₹834.68 crore. The funds raised will be used to prepay or repay outstanding loans and for general corporate purposes.
Axis Capital Ltd, Intensive Fiscal Services Private Ltd, and JM Financial Ltd are the book-running lead managers for the Baazar Style Retail IPO, while Link Intime India Private Ltd is the registrar.
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