Baazar Style Retail IPO: Rekha Jhunjhunwala-Backed Issue Sees 72% Subscription on Day 1 – Should You Buy? Get GMP, Review, and Details Here

The initial public offering (IPO) of Baazar Style Retail Limited opened in the Indian market on 30th August 2024 and will be available for investors to bid on until 3rd September 2024. This IPO is supported by Rekha Jhunjhunwala and aims to raise ₹834.68 crore. The price band for the IPO is set between ₹370 and ₹389 per share. The offering includes both a fresh issue of shares worth ₹148 crore and an Offer for Sale (OFS) worth ₹686.68 crore. On the first day of bidding, the IPO was 72% subscribed.

Grey Market Premium (GMP)

The grey market has shown positive sentiment towards Baazar Style Retail’s IPO. Currently, the shares are trading at a premium of ₹127 in the grey market. This suggests a potential listing gain of around 33% for investors, even with two more days of bidding left.

IPO Subscription Status

After the first day, the IPO was subscribed 0.72 times overall. The retail portion saw a subscription rate of 0.82 times, the Non-Institutional Investor (NII) segment was subscribed 0.47 times, and the Qualified Institutional Buyer (QIB) portion was subscribed 0.70 times.

IPO Review

Several brokerages have recommended subscribing to the IPO. Master Capital Services highlighted the growth potential in the lifestyle and home value retail industry, which was valued at ₹6,592.11 billion. Baazar Style Retail holds a 2.15% market share in the organized value retail market in Eastern and North-Eastern India as of Fiscal 2024. The company aims to increase profit margins and revenue from its private labels by focusing on product quality and differentiation.

Nirmal Bang also recommended subscribing, noting that the company’s revenue grew at a CAGR of 33% during FY22-24, outperforming the industry’s CAGR of 19.3% in the same period. Although the issue might seem expensive based on a P/E ratio of 135x FY24 earnings, it appears reasonable when considering an EV/EBITDA basis of 21.5x FY24 earnings, compared to the industry average of 28x.

Other brokerages like Arihant Capital, DRChoksey, StoxBox, and Master Capital have also given a “subscribe” recommendation for long-term gains.

Rekha Jhunjhunwala’s Involvement

According to the Red Herring Prospectus (RHP), Rekha Jhunjhunwala has offered 2,723,120 of her equity shares in this IPO, worth approximately ₹106 crore. These shares are part of the Offer for Sale (OFS) route.