Baazar Style Retail IPO subscribed 3.5x on Day 2 so far; GMP falls sharply
West Bengal based-Baazar Style Retail is selling its shares in the price band of Rs 370-389 apiece. Investors can apply for a minimum of 38 shares and its multiples thereafter.
- Sep 2, 2024,
- Updated Sep 2, 2024 3:13 PM IST
The initial public offering (IPO) of Baazar Style Retail continued to attract a decent response from investors during the second day of bidding process. The Rekha Jhunjhunwala-backed issue, which had kicked off on Friday, August 30, was subscribed a little more than 70 per cent on day one.
The Baazar Style Retail is selling its shares in the price band of Rs 370-389 apiece. Investors can apply for a minimum of 38 shares and its multiples thereafter. It is looking to raise Rs 834.68 crore via IPO, which includes a fresh share sale of Rs 148 crore, and an offer-for-sale (OFS) of up to 1.76 crore equity shares.
According to the data, the investors made bids for 5,23,82,050 equity shares, or 3.49 times, compared to the 1,50,30,116 equity shares offered for the subscription by 2.45 pm on Monday, September 01. The three-day bidding for the issue will conclude on Tuesday, September 02.
The allocation for non-institutional investors (NIIs) was subscribed 8.10 times, while the portion reserved for retail investors saw a subscription of 3.04 times. Employee portion was booked about 16.25 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was subscribed 71 per cent as of the same time.
Incorporated in 2013, Baazar Style Retail stores averaged 9,046 square feet and were staffed by trained employees to enhance customer experience as of March 31, 2024. The company operates in Odisha, Bihar, Assam, Jharkhand, Andhra Pradesh, Uttar Pradesh, Tripura, and Chhattisgarh. It has expanded across 9 states and operates 162 stores as of March 31, 2024.
The grey market premium of Baazar Style Retail has seen a sharp correction amid the rising volatility in the broader markets. Last heard, the company was commanding a premium of Rs 65 per share in the unofficial market, suggesting a listing pop of about 17 per cent for the investors. However, the premium in the grey market stood around Rs 125 on the first day of the bidding.
Brokerages are mostly positive on the issue suggesting investors to subscribe to it for a long term citing their market share, solid growth, operationally efficiency, strong management experience and push for its own labels. However, a major OFS portion, regional concentration in a single region and rich valuations are the key concerns for the company.
Baazar Style intends to take advantage of opportunities in the organized value retail market in Eastern India and North-Eastern India for Fiscal 2024. They further intend to expand profit margins and increase revenue contribution from its private labels while focusing on creating differentiation and achieving greater control over the product quality of private labels, said Master Capital Services.
"The company also plans to strengthen its market position by increasing penetration in existing clusters, expanding its footprint in the Focus Markets, increasing focus on customer retention, and garnering brand loyalty. Investors looking to invest can invest in the IPO for the medium to long term," it added.
Ahead of its IPO, Baazar Style Retail raised Rs 250.1 crore via anchor investor as it allocated 64.29 lakh shares at Rs 389 apiece to them. Baazar Style Retail reported a net profit of Rs 21.94 crore with a revenue of Rs 982.83 crore for the financial year ended on March 31, 2024.
Baazar Style Retail has reserved shares worth Rs 1 crore for the eligible employees of the company, who will get a discount of Rs 35 per share. 50 per cent of the net offer has been reserved for the qualified institutional bidders (QIBs), while retail investors will have 35 per cent of the allocations. Remaining 15 per cent of the net off shall go to non-institutional investors (NIIs).
Bazaar Style Retail was the fastest-growing value retailer between 2017 to 2024. It showed improvement in margins and growth in both its top and bottom lines. The IPO's P/E valuation is on the higher side, said Swastika Investmart.
"While high valuation may be a deterrent, strong market demand is expected to support a positive listing. Investors may choose to prioritize listing gains, but a cautious approach is warranted due to valuation," it added.
JM Financial, Axis Capital and Intensive Fiscal Services are the book running lead managers of the Baazar Style Retail IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with Friday, September 6 as the tentative date of listing.
The initial public offering (IPO) of Baazar Style Retail continued to attract a decent response from investors during the second day of bidding process. The Rekha Jhunjhunwala-backed issue, which had kicked off on Friday, August 30, was subscribed a little more than 70 per cent on day one.
The Baazar Style Retail is selling its shares in the price band of Rs 370-389 apiece. Investors can apply for a minimum of 38 shares and its multiples thereafter. It is looking to raise Rs 834.68 crore via IPO, which includes a fresh share sale of Rs 148 crore, and an offer-for-sale (OFS) of up to 1.76 crore equity shares.
According to the data, the investors made bids for 5,23,82,050 equity shares, or 3.49 times, compared to the 1,50,30,116 equity shares offered for the subscription by 2.45 pm on Monday, September 01. The three-day bidding for the issue will conclude on Tuesday, September 02.
The allocation for non-institutional investors (NIIs) was subscribed 8.10 times, while the portion reserved for retail investors saw a subscription of 3.04 times. Employee portion was booked about 16.25 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was subscribed 71 per cent as of the same time.
Incorporated in 2013, Baazar Style Retail stores averaged 9,046 square feet and were staffed by trained employees to enhance customer experience as of March 31, 2024. The company operates in Odisha, Bihar, Assam, Jharkhand, Andhra Pradesh, Uttar Pradesh, Tripura, and Chhattisgarh. It has expanded across 9 states and operates 162 stores as of March 31, 2024.
The grey market premium of Baazar Style Retail has seen a sharp correction amid the rising volatility in the broader markets. Last heard, the company was commanding a premium of Rs 65 per share in the unofficial market, suggesting a listing pop of about 17 per cent for the investors. However, the premium in the grey market stood around Rs 125 on the first day of the bidding.
Brokerages are mostly positive on the issue suggesting investors to subscribe to it for a long term citing their market share, solid growth, operationally efficiency, strong management experience and push for its own labels. However, a major OFS portion, regional concentration in a single region and rich valuations are the key concerns for the company.
Baazar Style intends to take advantage of opportunities in the organized value retail market in Eastern India and North-Eastern India for Fiscal 2024. They further intend to expand profit margins and increase revenue contribution from its private labels while focusing on creating differentiation and achieving greater control over the product quality of private labels, said Master Capital Services.
"The company also plans to strengthen its market position by increasing penetration in existing clusters, expanding its footprint in the Focus Markets, increasing focus on customer retention, and garnering brand loyalty. Investors looking to invest can invest in the IPO for the medium to long term," it added.
Ahead of its IPO, Baazar Style Retail raised Rs 250.1 crore via anchor investor as it allocated 64.29 lakh shares at Rs 389 apiece to them. Baazar Style Retail reported a net profit of Rs 21.94 crore with a revenue of Rs 982.83 crore for the financial year ended on March 31, 2024.
Baazar Style Retail has reserved shares worth Rs 1 crore for the eligible employees of the company, who will get a discount of Rs 35 per share. 50 per cent of the net offer has been reserved for the qualified institutional bidders (QIBs), while retail investors will have 35 per cent of the allocations. Remaining 15 per cent of the net off shall go to non-institutional investors (NIIs).
Bazaar Style Retail was the fastest-growing value retailer between 2017 to 2024. It showed improvement in margins and growth in both its top and bottom lines. The IPO's P/E valuation is on the higher side, said Swastika Investmart.
"While high valuation may be a deterrent, strong market demand is expected to support a positive listing. Investors may choose to prioritize listing gains, but a cautious approach is warranted due to valuation," it added.
JM Financial, Axis Capital and Intensive Fiscal Services are the book running lead managers of the Baazar Style Retail IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with Friday, September 6 as the tentative date of listing.