Baazar Style IPO To Fetch Over Rs 105 Crore For Rekha Jhunjhunwala

Rekha Jhunjhunwala, wife of deceased investor Rakesh Jhunjhunwala, is poised to make over Rs 105 crore by divesting her stake in Baazar Style Retail Ltd. through the company's ongoing initial public offering.

Baazar Style Retail Ltd., which operates as its retail brand Style Baazar, launched its IPO to raise Rs 834.7 crore on Friday. The offering includes a fresh issue of around 38.05 lakh shares and an offer for sale of 1.77 crore shares by existing promoters and investors, with each share having a face value of Rs 5 per share.

Rekha Jhunjhunwala held 7.69% stake in Baazar Style Retail, equating to 54.46 lakh shares. She is selling up to 27.23 lakh shares under the OFS portion of the IPO. Sold at the upper end of the price band—Rs 389 per share—Jhunjhunwala stands to earn Rs 105.92 crore from this transaction.

Upon demise of Rakesh Jhunjhunwala, the equity shares held by him were transmitted to Rekha Jhunjhunwala in her capacity as his nominee and legal heir. As per the prospectus for the issue, her acquisition cost for the shareholding stands at nil, the document shows.

Rakesh Jhunjhunwala had bought stake in the company back in 2018.

The IPO price band is set at Rs 370 to Rs 389 per share. The offering is expected to close on Sept. 3. The IPO aims to raise capital through both a fresh issue and an offer for sale. The fresh issue is expected to raise Rs 148 crore, while the offer for sale is projected to generate Rs 686.7 crore.

The IPO's minimum lot size is Rs 14,782 for 38 shares. Small non-institutional and large non-institutional investors will need to invest Rs 2.07 lakh and Rs 1.01 lakh, respectively, for larger lots.

Proceeds from the IPO will be used for the prepayment or repayment of existing borrowings and other general corporate purposes. The company’s shares are set to be listed on the Bombay Stock Exchange and the National Stock Exchange on Sept. 6.

Originally incorporated as Dwarkadas Mohanlal Pvt. in June 2013, Baazar Style Retail has grown into a value fashion retailer, particularly in eastern India. It operates Style Baazar, offering a wide range of affordable apparel and general merchandise. The company has a market share of 3.03% in West Bengal and 2.22% in Odisha's organised value retail market.

With 162 stores spanning 146 cities and covering 1.47 million square feet, Baazar Style Retail has established itself as the fastest-growing value retailer from 2017 to 2024.

The company reported a revenue of Rs 749.3 crore for the nine months ending December 2023, up from Rs 787.9 crore for fiscal 2023. It achieved a turnaround with a net profit of Rs 28.3 crore, compared to Rs 5.1 crore in financial year 2023, after facing losses in financial year 2022 and financial year 2021. The company's Ebitda for the nine-month period rose to Rs 118.5 crore, with a margin of 15.82%.