Go Fashion India IPO: Top 10 things to know as issue opens on November 17 - know what brokerage has to say

The initial public offer (IPO) spree continues as a woman apparels company — Go Fashion (India) under the brand name of Go Colours is all set to launch its share sale from Wednesday, November 17, 2021 and will be active till November 22, 2021.  

Here are the top 10 things you need to know ahead of the IPO opening 

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1) The Rs 1,014-crore IPO comprises fresh issue of equity shares aggregating up to Rs 125 crore and an offer-for-sale of up to 12,878,389 equity shares by promoter and existing shareholders, the draft red herring prospectus (DRHP) showed. The price-band set is between Rs 655-690 per share. 

2) Under the OFS, PKS Family Trust and VKS Family Trust will offload 7.45 lakh equity shares each, Sequoia Capital India Investments will sell up to 74.98 lakh shares, India Advantage Fund S4 I will divest up to 33.11 lakh shares and Dynamic India Fund S4 US I will sell up to 5.76 lakh shares. 

3) It said 75 per cent of the issue size is kept reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors, and the remaining 10 per cent has been set aside for retail investors. Investors can bid for a minimum of 21 equity shares and in multiples thereof. 

4) The net proceeds from the issue will be used to fund the rollout of 120 new exclusive brand outlets, to support working capital requirements and general corporate purposes. 

5) JM Financial, DAM Capital Advisors (Formerly IDFC Securities) and ICICI Securities are the lead managers to the issue. The equity shares will be listed on BSE and NSE. 

6) Go Fashion (India) is engaged in the development, design, sourcing, marketing and retailing of a range of women's bottom-wear products under the brand, 'Go Colors'. 

7) It serves customers primarily through their extensive network of 459 exclusive brand outlets (EBOs), including 12 kiosks operated on the company owned and company operated (COCO) model and 11 franchise stores that are spread across 23 states and UTs in India. 

8) In terms of positives, according to Angel Broking, the company is one of the largest women's bottom-wear brands in India; it has a wide, well-diversified, product portfolio and first-mover advantage; the company has a strong financial performance record. 

9) In terms of valuations, the post-issue FY20 EV/EBITDA works out -30.2x to (at the upper end of the issue price band), which is almost in similar range compared to its peers TCNS Clothing Co. (FY20 EV/EBITDA -29.3x), the brokerage firm points out. 

10) Recommending a subscribe rating, the brokerage says, Go Fashion (India) has better track record of revenue growth, higher operating margin & high Return on equity compared to TCNS Clothing. And, believe valuation is at reasonable levels considering all the positive factors.