Go Fashion makes stellar debut, stock lists at 91% premium to issue price

Shares of Go Fashion (India) have made a stellar market debut, with stock listed at Rs 1,316, a 91 per cent premium over its issue price of Rs 690 per share on the BSE on Tuesday. On the National Stock Exchange (NSE), the stock opened at Rs 1,310, 90 per cent higher as against its issue price.

Post listing the stock hit a high of Rs 1,341 and a low of Rs 1,215 on the BSE. At 10:01 am, it was trading at Rs 1,226, 78 per cent higher from its issue price and 7 per cent down from its opening level. A combined 4.8 million shares changed hands on the counter on the NSE and BSE.

Go Fashions is the first company to launch a brand exclusively dedicated to the women’s bottom-wear category. It is a play on the unorganised to the modern retail shift. The company is a one stop shop for women’s bottom-wear under the brand ‘Go Colors’. It is among the few apparel players in India to have identified the market opportunity in women’s bottom-wear and acted as a ‘category creator’ for the same.

The initial public offering (IPO) of Go Fashion had got strong response from all types of investors with issue was subscribed a staggering 135 times. The institutional portion was subscribed 101 times, the wealthy investor portion by 262 times and the retail portion by 50 times, data shows.

The company plans to use the proceeds of the fresh issue to fund the roll-out of 120 new exclusive brand outlets and support working capital requirements. While, most of the brokerages had recommended subscribe to Go Fashion IPO.

Go Fashion is a one-stop-shop with bottom-wear sold across categories such as ethnic wear, western wear, fusion wear, athleisure, denims and for every occasion. As of September 30, 2021 the company sold bottom-wear in 50 styles and more than 120 colours. It generates healthy gross margins (~60 per cent plus) as round the year relevance of product portfolio allows it to typically retail products at full price and with discounts offered only in limited circumstances, ICICI Securities said in IPO note.

With the expected growth in the bottom wear industry and with shift from unorganized to organized market, with higher number of EBOs at right location will lead to higher revenue to the company. Going ahead, higher growth accompanied with reduction in working capital cycle will lead to higher operating cash flows to company. This will lead to funding of opening of new stores through internal accrual, Nirmal Bang Securities said.

The current and continuing impact of the ongoing COVID-19 pandemic on the business and operations has been significant. The impact of the pandemic on the operations in the future, including its effect on the ability or desire of customers to visit stores, is uncertain and may be significant and continue to have an adverse effect on the business prospects, strategies, business, operations, the future financial performance, and the price of the equity shares, are among key concerns said HDFC Securities.