Baazar Style Retail IPO Subscribed Nearly 8 Times on Day 3; GMP Falls to 16%. Check details

The initial public offering (IPO) of Baazar Style Retail was subscribed 7.6 times by the end of Day 3, showing strong interest from non-institutional investors. The IPO had already been fully subscribed by the second day of bidding.

Around midday, the portion reserved for retail individual investors (RIIs) was subscribed 5.5 times. The non-institutional investor (NII) category saw even stronger demand, with subscriptions at 22 times the available shares. However, the quota for qualified institutional buyers (QIBs) was only 87% filled.

Despite this strong demand, the grey market premium (GMP) for Baazar Style Retail shares has dropped to around ₹65, representing a 16% premium over the issue price. On the first day of bidding, the GMP was ₹130, indicating a 33% premium.

IPO Details

The IPO consists of a fresh equity issue worth ₹148 crore and an offer for sale (OFS) of up to 1.76 crore shares. Among those selling shares under the OFS is Rekha Jhunjhunwala. The money raised from the IPO will be used to repay debts and for general corporate purposes.

Baazar Style Retail IPO Price Band

The company has set the IPO price band at ₹370-₹389 per share. Investors can bid for a minimum of 38 shares in one lot.

Analysts’ Recommendations

Analysts are recommending investors subscribe to the IPO, citing the company’s strong position in the growing Indian retail market.

“Compared to its peers, Baazar Style Ltd is growing faster and is trading at a discount with a FY24 adjusted price-to-earnings (PE) ratio of 132x, compared to 139x for V2 Retail. Considering these factors, we recommend subscribing to the IPO,” said Deven Choksey Research.

Brokerage firm Geojit also gave a positive review, stating, “Considering the rising demand, aggressive store expansion, customer retention, and positive industry growth, we recommend a ‘subscribe’ rating for the short to medium term.”

About Baazar Style Retail

Kolkata-based Baazar Style Retail is a value fashion retailer with the largest retail footprint in Eastern India, holding leadership positions in West Bengal and Odisha’s organized value retail markets. As of March 31, 2024, the company operated 162 stores covering over 1.47 million square feet across 146 cities under the brand name “Style Bazaar.”

The company has a market share of 3.03% in West Bengal and 2.22% in Odisha in the organized value retail market.

Baazar Style Retail is backed by notable investors, including Rekha Rakesh Jhunjhunwala, Kewal Kiran Clothing, and Manohar Lal Agarwal, the promoter of Haldiram Snacks.

The company’s revenue from operations grew from ₹551 crore in FY22 to ₹973 crore in FY24, with a compound annual growth rate (CAGR) of 32.86%. In comparison, the overall lifestyle and home value retail market grew at a CAGR of 19.3% during the same period.

The IPO is being managed by Axis Capital, Intensive Fiscal Services, and JM Financial.