Bazaar Style Retail, a prominent value fashion retailer backed by Rekha Jhunjhunwala, has launched its initial public offering (IPO) today, August 30, 2024. The company is seeking to
Bazaar Style Retail, a prominent value fashion retailer backed by Rekha Jhunjhunwala, has launched its initial public offering (IPO) today, August 30, 2024. The company is seeking to raise up to Rs 835 crore through this public offering, marking a significant milestone in its growth journey. With a price band set between Rs 370 and Rs 389 per share, the IPO is poised to attract substantial interest from investors, particularly those looking to tap into the burgeoning retail sector in India.
The IPO offers shares in a price range of Rs 370-389 per share. Investors can bid for a minimum of 38 shares, with additional bids to be made in multiples of 38 shares. The subscription period will last until September 3, giving potential investors a limited window to participate in the offering.
The total issue size of Rs 835 crore includes a fresh issue component of Rs 148 crore and an offer-for-sale (OFS) component of up to 1.76 crore shares. The OFS allows existing shareholders, including Rekha Jhunjhunwala and other prominent stakeholders, to liquidate their holdings. This dual approach provides a blend of new capital injection and liquidity for current investors.
Bazaar Style Retail operates as a value fashion retailer, primarily catering to customers in West Bengal and Odisha. The company has extended its footprint to other states such as Assam, Bihar, and Jharkhand, offering affordable and stylish clothing for families. As of March 31, 2024, Bazaar Style Retail boasts a network of 162 stores spread across nine states, each averaging 9,046 square feet.
For the financial year ending March 2024, Bazaar Style Retail reported a net profit of Rs 21.94 crore on a revenue of Rs 982.83 crore. This performance reflects the company’s robust business model and its ability to cater to a diverse customer base with cost-effective fashion solutions.
Bazaar Style Retail’s growth strategy revolves around expanding its presence in tier 3 and tier 4 cities. By leveraging a cluster-based expansion model, the company aims to penetrate new markets while maintaining operational efficiency. This approach not only helps in increasing the store count but also strengthens the company’s brand presence in less saturated regions.
The proceeds from the fresh issue of the IPO will be used primarily to repay outstanding borrowings. This strategic move will reduce the company’s debt burden, potentially improving its financial stability and enhancing shareholder value. The remaining funds will be allocated for general corporate purposes, which may include further expansion, technology upgrades, or other business needs.
Ahead of the IPO, Bazaar Style Retail conducted a pre-IPO placement, raising Rs 37 crore. This pre-IPO activity has resulted in a reduction in the size of the fresh issue. Additionally, the company has secured Rs 250.1 crore through the allocation of shares to anchor investors at the upper end of the price band, Rs 389 per share. Key anchor investors include Ashoka India Equity Investment Trust, Volrado Venture Partners, and HSBC Global, among others. These investments not only provide a solid foundation for the IPO but also signal confidence in the company’s growth prospects.
The Indian retail sector has shown resilience and potential for growth, driven by rising disposable incomes, urbanization, and changing consumer preferences. Bazaar Style Retail’s focus on value fashion positions it well to capitalize on these trends, particularly in the price-sensitive segments of the market. The company’s ability to offer affordable, stylish clothing aligns with the increasing demand for cost-effective fashion solutions, especially in tier 3 and tier 4 cities.
Investor sentiment towards the IPO is expected to be positive, given the company’s strong financial performance, strategic growth plans, and backing from well-known investors like Rekha Jhunjhunwala. However, potential investors should consider factors such as market conditions, the company’s debt levels, and competitive pressures in the retail sector before making investment decisions.
The issue’s book-running lead managers are Axis Capital, Intensive Fiscal Services Private Limited, and JM Financial Limited. These firms are responsible for managing the IPO process and ensuring its smooth execution. Link Intime India Private Ltd is serving as the issue’s registrar, handling the administrative aspects of the subscription process.
Bazaar Style Retail’s management, led by experienced professionals with a deep understanding of the retail sector, is focused on executing its growth strategy and enhancing operational efficiencies. The company’s emphasis on expanding into new markets and leveraging cost-effective business models reflects its commitment to long-term success and value creation for shareholders.
The Bazaar Style Retail IPO represents a significant opportunity for investors to participate in the growth of a leading value fashion retailer in India. With a well-defined growth strategy, strong financial performance, and backing from prominent investors, the IPO is likely to attract considerable interest. Investors should carefully review the offering details, assess their investment objectives, and consider market conditions before making a decision. As Bazaar Style Retail embarks on this new phase of its journey, the IPO marks an important step in its quest to become a leading player in the Indian retail sector.
