Baazar Style Retail makes quiet debut; lists at par versus issue price

Post listing, the stock of speciality retail company has moved higher to Rs 415.50, a 7 per cent premium over its issue price of Rs 389 per share on the BSE at 10:04 am.

Baazar Style Retail (BRSL) made a listless stock market debut, with its shares listed at par against its issue price of Rs 389 per share on the National Stock Exchange (NSE) and BSE on Friday. 

Post listing, the stock of speciality retail company moved higher to Rs 415.50, a 7 per cent premium over its issue price on the BSE at 10:04 am. The stock fell below its issue price, to hit a low of Rs 378.15 on the BSE and Rs 378.40 on the NSE in intra-day trades. A combined 9.6 million equity shares changed hands on the NSE and BSE in early deals.

 

BSRL is one of the fastest growing value fashion retailer in Eastern India with a market share of 3.03 per cent in West Bengal and 2.22 per cent in Odisha. It operates 162 stores spread across over 1.47 mn sq ft located in 146 cities. In addition to affordable products under the apparels section, BSRL also offers non-apparels and home furnishing products.

The public issue of Baazar Style Retail witnessed favourable investor interest, being subscribed 40.63 times. The highest demand came from Qualified Institutional Buyers (QIBs), who subscribed 81.83 times, followed by non-institutional investors (NIIs) who subscribed 59.41 times, and retail investors at 9.07 times, data shows.

Shivani Nyati, Head of Wealth at Swastika Investmart, said that BRSL’s impressive growth trajectory, margin improvement, and robust financial performance bode well for its future. However, the IPO's valuation is on the higher side, which, as per her, could temper investor enthusiasm.

BSRL enjoys good market share in the states of WB and Odisha backed by its focus to grow in Tier3 and Tier 4 cities. The company over the years has built strength in understanding and creating affordable products for its customers and has garnered customer stickiness. Going forward, BSRL plans to derive growth from existing core markets as well as target other focused markets. 

The company's revenues grew at a compound annual growth rate (CAGR) of 33 per cent during FY22-24, while the overall lifestyle and home value retail market grew at CAGR of ~19.3 per cent during the same period, analyst at Nirmal Bang Research said.

The company’s cluster-based expansion model has proven effective by rapidly adding new stores near existing ones to boost operational efficiency and market presence. A significant focus on expanding private label offerings has driven growth, with a remarkable 64.57 per cent CAGR in this segment.

By maintaining its focus on the value retail segment and expanding its online presence, BRSL is well-positioned to capture a larger share of the growing Indian retail market, said analyst at Deven Choksey Research.

However, the industry is intensely competitive and characterized by many organized players. The company faces competition from various kinds of fashion players including, players operating in retail, wholesale and e-commerce space. Further, the company competes with national and local department stores and independent retail stores that market similar lines of merchandise as us. Some of the competitors include Baazar Kolkata, M Baazar, V Mart, V2 Retail and City Kart, according to analysts.