Go Colors’ parent company is listed at 90% premium

NS 1,014 crore issue subscribed 135.46 times in the price band of Rs. 655-690.

In terms of valuations, post FY20 EV/Ebitda works out to 30.2x, which is in the same range as its counterpart TCNS Clothing Company, said Angel One Ltd analyst Amarjit Maurya.

Further, 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, he added.

GoColors will not receive any income from the Offer for Sale (OFS) and the proceeds from the OFS will not form part of the Net Income. The net proceeds will be used to fund the roll-out of 120 new exclusive brand outlets (EBOs), working capital requirements and general corporate objectives.

“on the upper price band” 690, the stock is available for sale/market capitalization of 14.9 times (FY21) which is fully reflected in the price,” Geojit Financial Services Ltd said.

It said that the increasing number of working women, increase in disposable income and consumer’s shift towards buying from safe and clean facilities augurs well for the company.

The brokerage firm considers the company its investments in digital channels, omnichannel linkages, focus on e-retail, distribution growth strategy to tap customers in Tier-I to Tier-III cities and expansion plans for existing and new on a long term basis. Market.

“Go Fashion is the first company to launch a brand exclusively dedicated to the women’s bottom-wear category. It is a play on the modern retail makeover from the unorganized. At the upper end of the price band, it is valued at 9.4 times, 14.6 times EV/sales for FY15, FY21 respectively,” said analysts at ICICIDirect.

However, he noted that dependence on a single brand and category, high store network concentration in southern and western India and reliance on a single warehouse for pan-India distribution are major risks and concerns.