Baazar Style Retail IPO Day 2: The initial public offering (IPO) of Baazar Style Retail Limited hit the Indian primary market last week. This Rekha Jhunjhunwala-backed public offer will remain subscription-free until 3rd September 2024, i.e., today. So, the primary market investors have just one day to apply for the running mainboard IPO. The company has fixed a Baazar Style Retail IPO price band at ₹370 to ₹389 per equity share, and it aims to raise ₹834.68 crore from its initial offer. The public issue is a mix of fresh issue and Offer for Sale (OFS) as it seeks ₹148 crore through the issuance of fresh shares, and ₹686.68 crore has been reserved for the OFS route. After two days of bidding, Baazar Style Retail IPO subscription status reveals that the mainboard issue has been booked 72 per cent.
Meanwhile, the grey market continues to signal positive vibes regarding Baazar Style Retail IPO. According to stock market observers, Baazar Style Retail Limited shares are available at a premium of ₹62 in today's grey market. Today's Baazar Style Retail IPO GMP (grey market premium) is ₹62. So, after two days of bidding, the grey market signals around 16 per cent listing gain for potential allottees even when two days of the Baazar Style Retail IPO subscription are still left.
By 2:54 PM on day 3 of bidding, the Rekha Jhunjhunwala-backed public issue had been subscribed 23.03 times, the retail portion of the book build issue had been booked 7.67 times, the NII segment had been filled 48.06 times, and the QIB portion had been subscribed 31.07 times.
Giving a 'subscribe' tag to the public offer, Arihant Capital says, "The company is set for strong growth and profitability by expanding its private label segment, which constituted 37.93% of revenue in FY24. With a 23.62% CAGR, strategic store expansion targets high-growth areas and enhances market presence. Investment in advanced processes and automation ensures operational efficiency, while targeted marketing and customer retention strategies boost brand loyalty and revenue growth. The upper band of ₹389 is valued at a P/E ratio of 132x, based on an FY24 EPS of INR 2.94. We are recommending a "Subscribe" for this issue."
Master Capital has also assigned a 'subscribe' tag to this mainboard IPO, saying, "The company's revenues grew at a CAGR of 33% during FY22-24, while the overall lifestyle and home value retail market grew at CAGR of ~19.3% during the same period. While on a P/E basis of 135x FY24 earnings, the issue looks expensive, on an EV/EBIDTA basis of 21.5x FY24 earnings, it looks reasonable vs the industry average of 28x, and thus, we are recommending 'Subscribe' to the issue for long-term gains."
In the wake of the ‘T+3’ listing rule, the most likely Baazar Style Retail IPO allotment date is 4 September 2024, and the Baazar Style Retail IPO listing date is 6 September 2024.
As per the Red Herring Prospectus of Baazar Style Retail IPO, Rekha Jhunjhunwala has offered her 2,723,120 equity shares in this mainboard IPO. These offered shares aggregating to ₹1,05,92,93,680 or around ₹106 crore. According to the RHP of Baazar Style Retail IPO available on SEBI's website, Rekha Jhunjhunwala's name is on the list of Investor Selling Shareholders. She has offered her shares under the OFS route.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
