GO FASHION IPO

IPO Details:

Price Band: 655-690

Cutoff Price: 690

About Company:

Go Fashion is a women’s bottom-wear brand in India, with a market share of approximately 8% in the branded women’s bottom-wear market. The women’s apparel market is estimated to be approximately 36% of the total apparel market while the women’s bottom-wear market contributed 8.3% of women’s apparel market. Company is engaged in the development, design, sourcing, marketing and retailing a range of women’s bottom-wear products under the brand, ‘Go Colors’. Go Fashion is among the few apparel companies in India to have identified the market opportunity in women’s bottom-wear and have acted as a ‘category creator’ for bottom-wear. Go Fashion is the first company to launch a brand exclusively dedicated to women’s bottom-wear category and have leveraged this advantage to create a direct-to-consumer brand with a diversified and differentiated product portfolio of premium quality products at competitive prices.

Competitive Strengths:

1. Women’s bottom-wear brand in India with a well-diversified product portfolio.

2. Multi-channel pan-India distribution network with a focus on EBOs, enhancing brand visibility.

3. Strong unit economics with an efficient operating model.

4. Extensive procurement base with highly efficient and technology-driven supply chain management.

5. In-house expertise in developing and designing products.

6. Demonstrated track record of strong financial performance.

Strategies:

1. Leverage leadership position in women’s bottom-wear market and focus on additional product launches and Same-Store Sales Growth.

2. Continue to expand retail network with a focus on EBOs.

3. Grow sales through online channel.

4. Leverage technology to bring cost efficiency and enhance customer experience.

Financial Performance:

Revenue of the company got hit in FY21 due to the pandemic otherwise revenues in the last two years have grown significantly. Company's EPS was also negative for FY21.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

2. Funding roll out of 120 new EBOs

Competitors Comparison:

Go Fashion and ABFRL had negative EPS in FY 21 that's why P/E ration couldn't be computed. If we compare P/B ratio, then Go Fashion seems to be overvalued.

Grey Market Premium:

Our view: GMP of the IPO is good. Valuation seems to be high. I will subscribe to this IPO only for listing gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

Like and share with others too so that they can get the gist of this IPO.