Under the brand ‘Go Colors,’ Go Fashion is involved in the marketing, retailing, development, design, and sourcing of a variety of women’s bottom-wear goods.
The public subscription period for Go Fashion’s three-day initial public offering (IPO) began on Wednesday and will end on November 22, with the price band set at $655-690 per share. Go Fashion (India) Ltd, houses the women’s wear brand Go Colors, had tremendous interest from retail investors. It got a portion of the offering gets oversubscribed within minutes of its opening.
The issue had been subscribed 2.68 times as of 10:10 a.m. on Day 2 of bidding, with significant retail involvement leading the way. Retail investors, whose individual investments are limited to Rs. 2 lakh, subscribed 13.36 times.
The IPO comprises a fresh offering of equity shares worth up to 125 crores. A promoter and existing shareholder offer to sell up to 12,878,389 equity shares. The IPO gets expected to raise 1,013.6 crores at the top of the pricing band.
Go Fashion shares premium (GMP) has risen to 570 on the grey market today, according to market experts. On November 30, 2021, the company’s shares get planned to get listed on the BSE and NSE stock markets.
“We believe the company’s core category products, stronger gross margins, and return ratios are positives,” Anand Rathi wrote in a note with a Subscribe rating on the issue, citing the profitable and scalable EBO model. However, the brokerage house views the likelihood of future Covid-19 instances and reliance on a single brand and category, and severe competition, as threats.
Underneath the ‘Go Colors’ label, Go Fashion develops, manufactures, supplies, markets, and offers a full range of females’ lowest part items. The revenues from the new feature would get used to help finance the construction of 120 more exclusive label locations and meet financing needs and other overall business reasons.
“Most initial public offerings (IPOs) are projected to do well in the current market environment. We anticipate a reaction to Go Fashion’s initial public offering. Go Fashion will benefit in the long run as the textile industry grows. We encourage investors, however, to record the premium when the stock is first listed.
As of September 30, 2021, Go Colors had 459 Exclusive Brand Outlets (EBOs) scattered throughout 23 states and union territories in India.
TCNS Clothing Co., Go Fashion India has a track record of revenue growth, larger operating margins, and a higher Return on Equity. We believe this valuation is reasonable in light of all the favorable considerations. As a result, we propose giving the issue a subscribe rating.
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