three days Initial Public Offering (IPO) Off Go Fashion opens for public subscription today and ends on November 22, with a price band fixed 655-690 per share. The public issue Go Fashion (India) Ltd, which owns the women’s wear brand Go Colors, was seen as strong demand from retail investors as the share got oversubscribed within minutes of the opening.
At the end of the first day of bidding, the issue was subscribed 2.46 times due to strong retail participation. Retail investors who cannot invest more 2 lakh per person, subscribed 12.14 times out of the 1.47 million shares on offer.
IPO involves a fresh issue of equity shares, totaling up to 125 crore and offer for sale of 12,878,389 equity shares by the promoter and existing shareholders. At the upper end of the price band, the IPO is expected to fetch ₹1,013.6 crore.
According to market observers, the premium (GMP) of Go Fashion stocks has increased 535 in gray market today. The shares of the company are expected to be listed on the stock exchanges BSE and NSE on November 30, 2021.
“We believe the company’s core range of products, high gross margin and return ratio are positive,” Anand Rathi said in a note. The risk of having more COVID-19 cases likely; Dependence on a single brand and category and intense competition.
Go Fashion is engaged in the development, design, sourcing, marketing and retailing of a range of Women’s Bottom-wear products under the brand ‘GO Colours’. The proceeds from the new issue will be used to fund the roll out of 120 new exclusive brand outlets to support working capital requirements and general corporate objectives.
“In the current market scenario, most of the IPOs are expected to perform well. We expect the Go Fashion IPO to also get a good response during the listing. The boost in the textiles sector will also help Go Fashion in the long term. However, we We advise investors to book premium at the time of listing,” said Ravi Singh, Head of Research and Vice President, ShareIndia.
GoColors primarily serves its customers through its extensive network of 459 EBOs (Exclusive Brand Outlets), which are spread across 23 states and union territories of India as on 30th September, 2021.
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. Taking into account all the positive factors, we believe this assessment is at an appropriate level. As such, we recommend a subscription rating on this issue,” Angel One said in a note.
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