Introduction:
The Baazar Style Retail IPO would mark one of the major IPOs in the Indian market this calendar year. It is set to open for subscription from August 30 to September 3, 2024. The price band of the IPO was fixed at ₹370-₹389 per share. This IPO is targeted to raise ₹834.68 crores, comprising a fresh issue of ₹148 crores and an offer for sale of ₹686.68 crores by the existing shareholders.
Considering the fact that the company still continues to consolidate its position in the value retail segment, the interest around the IPO has been quite remarkable by all means among the investors. In the following text, the paper undertakes a thorough analysis of Baazar Style Retail IPO in terms of its key details, financial statement, market position, and the risks and opportunities for investors.
Baazar Style Retail IPO Details
The major details pertaining to the Baazar Style Retail IPO are listed as below:
- IPO Dates: The IPO dates are between August 30, 2024 and September 3, 2024. This is just a small five-day window within which investors can subscribe.
- Price Band: The shares are to be priced between ₹370 to ₹389 per share. This price band would determine the total investment that would be needed and also impact the participation of retail and institutional investors in the IPO.
- Lot Size: Minimum Application Lot would be 38 shares at the upper price band. Minimum investment would be around ₹ 14,782.
- Total Issue Size: The IPO comprises shares aggregating up to ₹834.68 crores.
- Fresh Issue: It includes a fresh issue of 3,804,627 shares aggregating up to ₹148 crores
- offer for sale: of up to 17,652,320 shares aggregating up to ₹686.68 crores.
- Employee Discount: The eligible employee, under the employee reservation portion of the issue, is offered a discount of ₹ 35 per share in the offer price. This makes the offer more comprehensible and related to others in the company.
- Listing Exchanges: The shares to be issued are proposed to be listed on the BSE as well as the NSE.
These details provide the backbone for the IPO and are of essence to the investor who would wish to understand what form his or her investment takes.
Baazar Style Retail IPO GMP (Grey Market Premium)
The GMP is the most important unofficial way of identifying investor sentiment that has prevailed over the shares. As of August 29, 2024, GMP for the Baazar Style Retail IPO is at ₹ 130. The above price indicated is what investors are willing to pay on the grey market over and above the issue price, marking a high demand and positive sentiment.
A high GMP generally indicates that the IPO is in great demand and could list higher when it goes live on the stock exchanges. Thus, for the investors, a GMP of ₹130 stands for the possibility for listing gains—an attractive opportunity if one is looking at getting involved for the short term. Though, the investors should note that GMP is neither a regulated measure nor should be the single parameter to base the decision on investing or not.
About the Company
Baazar Style Retail Limited, which operates under the brand “Style Bazaar,” has emerged as a major player in the value fashion retailing business, especially in Eastern India. The company was incorporated in June 2013. It has recorded fast growth and today comprises 162 stores spread across 146 cities, most of which are key locations in West Bengal and Odisha.
The business model of the company is focused on providing fashion, home decoration, and lifestyle products at very economical prices to customers belonging to the middle and lower middle-income groups. At competitive pricing and a value-for-money proposition, Baazar Style Retail has turned into a recognized name with loyal service for its customers, particularly in Tier II and Tier III cities. These are price-sensitive markets where consumers are looking for quality at reasonable prices, and these very demands have been the main impetus of Baazar Style Retail.
With the extensive network of stores and a strong brand presence, it is appropriately positioned to leverage Baazar Style Retail in demand for organized retail in India. Given the value retailing model that the company is pursuing, it means catering to a large and underserved market with significant growth opportunities.
Financial Performance
Apart from the above, the other most important area that an investor needs to look for in this business is the financial health of Baazar Style Retail. As the company has reflected extraordinary financial growth over the last couple of years, as:
- Revenue Growth: According to the financial results for FY23, Bazaar Style Retail posted a net revenue of INR 982.83 crores, up 23.5% over the prior fiscal year. This can only reflect how much success the company has achieved in its expansion strategy and improved sales volume within its store network.
- Profit: The Company’s PAT for the FY24 zoomed four times to ₹21.94 crores from ₹5.1 crores in the previous year. A four-fold jump in profitability is a volume announcement for the scalable operation of the company with a superior maintenance and enhancement of profit margins.
- EBITDA and Margins: The EBITDA for FY24 increased by 40% to ₹142.2 crores, with a better EBITDA margin growth of 14.6%, an increase of 170 basis points. Improvement in EBITDA margins signifies Baazar Style Retail regularly improves its operational efficiency—an essential factor in sustaining long-term profitability.
- Return Ratios: Return on equity improved at 10.74%, with the return on capital employed standing strong at 18.39%. Such return ratios reflect the good usage of the firm’s equity and capital in yield accruals, thus making its prospects a bit worthwhile for the investors.
Hereby, the robust financial performance from Baazar Style Retail unveils good growth prospects and operational efficiency. The consistent uptick in the company’s revenue, profitability, and margins affirms a deeply endowed business with foreseeable rapid growth.
Read More: Premier Energies IPO Price, Review, GMP, and Key Details
Investment Considerations
While evaluating the Baazar Style Retail IPO one can notice a few advantages and few risks, as well. In the subsequent section, there will be a balanced view cited in terms of what accounts for making the IPO attractive and what might pose challenges to it.
Advantages
1. Strong Market Positioning: Baazar Style Retail has emerged as the largest value retailer in Eastern India, more so in terms of the unserved Tier II and Tier III cities. Its wide presence across the cities and strong brand association gives it a competitive bed of nails for these locations.
2. Strong Financials: Steadily increasing revenues and improving profitability point to a strongly possible business model capable of maintaining growth. With huge growth in PAT, as well as EBITDA, Baazar Style Retail manages its costs very effectively and can scale up the business.
3. Expansion Potential: Baazar Style Retail has plans to further expand its store network, particularly in regions that are presently underserved by organized retail. This can drive further revenue growth and hence enhance your company’s market share in the value retailing segment.
4. Positive Market Sentiment: High GMP indicates that the IPO received adequate interest from investors, which might be a good performance indicator of the shares upon listing. Positive market sentiments have always been a forerunner to good performances upon listing and have often yielded substantial listing gains to the investors.
Risks
1. Market Competition: Retail in India is one of the most competitive businesses in its sector. Big retail chains and strong online online shopping platforms mean serious competition that could affect the potential profit/loss and level of business growth for Baazar Style Retail.
2. Economic Factors: The company’s performance is directly linked to consumer spending, but that often ebbs and flows based on overall economic conditions. Fluctuations in disposable income, inflation, and economic downturns could have an adverse effect on its sales and earnings.
3. Debt Levels: Though Baazar Style Retail intends to repay part of the debt from the IPO proceeds, there is still a risk due to existing borrowings. A highly indebted company faces strained finances, especially in adverse economic conditions.
4. Regional Concentration: Baazar Style Retail’s primary market could be found within Eastern India. While this has enabled brand development within the region, it also exposes the company to regional risks. Any economic or political instability within this region could have a disproportionate impact upon this company’s operations.
Conclusion
The IPO of Baazar Style Retail offers a great investment opportunity to be part of this vibrant Indian retail market. The company enjoys a considerable market presence in Eastern India, is well-poised in terms of healthy financial performance, and future growth; and expansion plans have further strengthened the cause of strong investor interest reflected in the premium being quoted in the Grey Market. They have given positive reports.
But the flip side of the coin is that potential investors need to take into consideration the risk one will face regarding the fierce competition in the retail sector, economic fluctuations, and regional concentration. Like every other form of an investment, one needs to consider his or her means, rewards, and, of course, the tolerance of such risks against the possible rewards within the given time span.
If you are bullish about the prospects of organized retail in India going forward and believe in the story of Baazar Style Retail, then this IPO can be a nice addition to your investment portfolio. Still, do remember to research thoroughly and take advice from a financial advisor if required to take any investment decision.
FAQs of Baazar Style Retail IPO
1. What are the Baazar Style Retail IPO opening dates?
The Baazar Style Retail IPO issue opens on August 30, 2024, and will close for subscription on September 3, 2024.
2. What is the price band of Baazar Style Retail IPO?
The price band for Baazar Style Retail IPO is between ₹370 and ₹389 per equity share.
3. What is the lot size for Baazar Style Retail IPO?
The minimum lot size for the Baazar Style Retail IPO is 38 shares. Therefore, the investors must bid for this IPO in lots of 38 shares.
4. How much is Baazar Style Retail planning to raise through the IPO?
Baazar Style Retail plans to raise approximately ₹834.68 crores through this IPO, which includes both a fresh issue and an offer for sale.
5. What is the Grey Market Premium of Baazar Style Retail IPO?
The Grey Market Premium of Baazar Style Retail IPO as of August 29, 2024, is ₹130 reflecting strong investor demand.
6. When will the Baazar Style Retail IPO list on the stock exchanges?
The shares of Baazar Style Retail are likely to get listed on BSE and NSE within a week, probably one week after the IPO close.
7. How can I apply for Baazar Style Retail IPO?
Investors can apply for the Baazar Style Retail IPO either through the ASBA process with their bank or using the UPI method through multiple stockbroking platforms.
8. What are the Risks Concerned with Baazar Style Retail IPO?
The primary risks in the business include :
• High Competition in Retail Business.
• Economic volatility that puts a dent on consumer expenditure.
• Geographic risk remains with the company’s concentration in Eastern India.
9. What is the financial performance of Baazar Style Retail?
In FY24, Baazar Style Retail achieved net revenues of ₹982.83 crores along with a profit after tax of ₹21.94 crores, growing substantially from the last year.
10. Who are the lead managers for the Baazar Style Retail IPO?
The Baazar Style Retail IPO lead managers are effectively Intensive Fiscal Services Private Limited, JM Financial Limited, and Axis Capital Limited. who will be at the helm of managing the entire process of the IPO issuance.