On November 18, the second day of bidding, the public offering of Go Fashion, which distributes women’s bottom-wear under the name Go Colors, received a strong response from the investors, with 5.55 times subscription.
Investors have proffered subscriptions for 4.48 crore equity shares, whereas the offer size was 80.79 lakh equity shares, as per the subscription data.
Retail investors have been actively participating in the bidding since day one, subscribing to shares 23.01 times their reserved portion, while the set-aside part of non-institutional investors is subscribed 1.87 times so far and the qualified institutional buyers subscribed 1.57 times.
On November 17, Go Fashion opened its Rs 1,013.61-crore public issue for subscription, which will close on November 22.
The offer’s price range has been set at Rs 655-690 per share.
“At the upper price band of Rs 690, Go Fashion is available at market cap/sales of 14.9x (FY21) which appears fully priced,” says Geojit Financial Services.
However, in terms of the company’s investment in digital channels, omnichannel engagement, E-retail centric approach, distributive growth strategy to cater to the customers from tier 1 to tier 3 cities and expansion plans for existing, and possibly new geographies, the brokerage called for a ‘subscribe’ rating for the issue on a long-term basis.
The company has decided to use the net proceeds from the fresh issue (Rs 125 crore) in rolling out 120 new EBOs, and meet working capital requirements, besides general corporate purposes.