Go Fashion IPO subscribed 2.46 times on day 1

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The initial public offering (IPO) of Go Fashion India Ltd, operator of GoColors, was subscribed 2.46 times on Wednesday, the first day of the issue led by strong retail participation.

Retail investors, whose investments cannot exceed 2 lakh per individual, subscribed 12.14 times of the 1.47 million shares on offer, data showed.

The robust subscription on the first day by retail was amid a 72% premium in the unofficial grey market. The price band set for the issue was at 655-690 a share and the current grey market premium is quoting at 500 a share, a dealer said.

At 5.30pm, the overall issue attracted bids for 19.90 million shares against the issue size of 8.08 million shares, excluding the anchor allotment, stock exchange data showed.

The institutional investors category subscribed 0.25 times while the non-institutional category comprising high networth individuals was subscribed 0.44 times.

The IPO is valued at 14.6x FY21 EV-to-sales, which looks to be at par with Trent, but at a significant premium to Aditya Birla Fashion & Retail (ABFRL). Trent and ABFRL are considered to be superior to  Go Fashion (GFL)  in most parameters.

“However, the share of organized retailing within women’s apparel has increased from 19% in FY15 to 27% in FY20, and is expected to reach 42% by FY25E, mainly due to the growing female population, increasing number of working women, evolving fashion trends, and rising spending power of consumers. In particular, women’s bottom-wear is the fastest-growing category in the women’s apparel segment, and is expected to grow to Rs243bn in FY25E, from Rs135bn in FY20. This offers healthy growth visibility to GFL in the long run”, Reliance Securities said in a note to its investors.

Meanwhile, Tarsons Products Ltd IPO subscribed 77.49 times on the final day of the issue. Retail investors applied 10.56 times. The institutional investor category was subscribed 115.77 times while the non-institutional category comprising high net worth individuals was subscribed 184.58 times.

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