The company is launching an IPO of Rs 835 crore comprising a fresh issue of Rs 148 crore and the rest is an offer for sale. The issue represents 29% of the post-issue stake.
Business: Founded in 2013, Kolkata-based Bazaar Style Retail sells men’s, women’s and children’s apparel as well as general merchandise through over 162 stores across 146 cities in nine states. As of fiscal 2024, 87% of the company’s revenue was generated from its stores in West Bengal, Odisha, Assam and Bihar.
The average store size is 9,046 sq ft and the average transaction value is ₹1,039. The company earned 38% of its FY24 revenue from the sale of its private labels.
Finance and Growth prospects: The company’s revenue has grown at a CAGR of 33% from ₹551 crore in FY22 to ₹973 crore in FY24. During the same period, the company turned around from a loss of ₹8 crore in FY22 to a profit of ₹22 crore in FY24. The company’s return on capital employed (RoCE) for FY24 stood at 18%. The proceeds from the fresh issue will be used to make the company debt-free. The company has adopted a cluster-based approach to grow in adjacent markets and states.Ratings: In an implicit market capitalization of over ₹2,902 crores, the IPO Values the company at nearly three times its fiscal 2024 revenue and 132.5 times its earnings. Listed apparel retailer V2 Retail is trading at a PE of 110, while V-Mart Retail Store is in deficit. Leading value retailer Avenue Supermarkets (DMart), which also sells apparel, is trading at a PE of 122. While Bazaar Style Retail is essentially a bet on apparel retail demand in India’s second- and third-tier cities, the valuations are too high for long-term investors.
Raises Rs 250 crore from Anchors
Baazar Style Retail has raised ₹250.1 crore from anchor investors in the upper price band of ₹389 per share ahead of the opening of its IPO on August 30. The company allotted 6.4 million shares to 28 investors.
HDFC Mutual Fund, Motilal Oswal Mutual Fund, WhiteOak Capital Mutual Fund and Bandhan Mutual Fund were some of the anchor investors in the company.
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