Baazar Style Retail IPO Review:The IPO of fashion retailer Bazaar Style Retail has opened for subscription today on 30 August 2024. The company has fixed the price band for the IPO at Rs 370 to Rs 389 per share. At the same time, the size of the IPO is around Rs 835 crore. Famous investor Rekha Jhunjhunwala also has a stake in Bazaar Style. This IPO will remain open for investment till 3 September. Shares will be allotted on 4 September, while its listing will be on 6 September.
Nirmal Bang: Subscribe for long term
Brokerage house Nirmal Bang has recommended to subscribe to Bazaar Style Retail for the long term. The brokerage says that due to its focus on growth in tier 3 and tier 4 cities, the company has a good market share in West Bengal and Odisha. In the last few years, the company has gained strength in understanding and creating affordable products for its customers and has increased customer attraction.
The company plans to achieve growth from its existing core markets as well as target other focused markets. While on a P/E basis of 135 times FY24 earnings, the issue seems expensive, however, on an EV/EBITDA basis of 21.5 times FY24 earnings, it looks reasonable compared to the industry average of 28 times.
Swastika Investmart : Invest with caution
Brokerage house Swastika Investmart has advised to invest cautiously in the IPO. The brokerage says that Bazaar Style Retail has been the fastest growing value retailer between 2017 and 2024. It has shown improvement on the margin and growth front in both its top and bottom line. The P/E valuation of the IPO is at a high level. Although high valuation can be a hindrance, strong market demand is expected to support a positive listing. Investors may choose to prioritize listing gains, but a cautious approach is necessary due to the valuation.
Rekha Jhunjhunwala will sell shares
Rekha Jhunjhunwala has about 7.69 percent stake in this company. She has 5,446,240 shares of the company. Out of these, she is going to sell 2,723,120 shares. In this way, she is going to get about Rs 106 crore from stake sale in IPO. The size of this IPO is 834.68 crore i.e. equal to 21,456,947 equity shares. In this, fresh equity shares worth Rs 148 crore will be issued. Whereas shares worth about Rs 686.68 crore will be sold through Offer for Sale.
How much reserve for whom
In the market style IPO, 35 percent share is reserved for retail investors. While 50 percent share is reserved for qualified institutional investors i.e. QIB. At the same time, about 15 percent share is reserved for non-institutional buyers i.e. NII. On buying shares in this IPO, the employees of the company are getting a discount of Rs 35 per share.
These promoters will also sell their stake
According to the IPO document, apart from Rekha Jhunjhunwala, 2240,680 shares will be sold by Intensive Softshare in this IPO. Promoters Madhu Surana, Sabita Agarwal, Subroto Trading & Finance, Rekha Kedia and Shakuntala Devi are also going to sell their stake.
GMP : 32 percent
There is a craze in the grey market about the IPO of Bazaar Style and the unlisted stock of the company is at a premium of Rs 125, which is a 32 per cent premium over the upper price band of Rs 389.
