The initial public offering of Baazar Style Retail Ltd. is set to open for subscription on Friday to raise Rs 834.7 crore. The IPO comprises a fresh issue of 38 lakh shares, amounting to Rs 148 crore, and an offer for sale of 1.77 crore shares, aggregating to Rs 686.7 crore.
The Rekha Jhunjhunwala-backed firm, which operates Style Baazar, has set a price band of Rs 370–389 per share for the three-day issue, which is set to close on Sept. 3. The market value at the upper end of the price band is Rs 2,903 crore.
The company intends to use the net proceeds for prepayment or repayment of all or part of certain outstanding borrowings, and general corporate purposes.
The minimum lot size is 38 shares. Retail investors will need to invest a minimum of Rs 14,782. Small non-institutional investors and big non-institutional investors have minimum lot sizes of 14 lots and 68 lots, requiring investments of Rs 2.07 lakh and Rs 1.01 lakh respectively.
Investors can expect the allotment of shares to be finalised on Sept. 4, with the listing on the BSE and the National Stock Exchange scheduled for Sept. 6.
Issue Details
Issue opens: Aug. 30.
Issue closes: Sept. 3.
Issue price: Rs 370–389 per share.
Total issue size: Rs 834.7 crore.
Fresh Issue: Rs 148 crore.
Offer for sale: Rs 686.7 crore.
Bid lot: 38 shares.
Listing: BSE and NSE.
Business
BSRL, originally incorporated as Dwarkadas Mohanlal Pvt. in June 2013, has evolved into a leading value fashion retailer with a strong presence in eastern India. The company, which offers a wide range of affordable apparel and general merchandise, holds a market share of 3.03% in West Bengal and 2.22% in Odisha's organised value retail market.
BSRL was the fastest-growing value retailer between 2017 and 2024, with its retail footprint now encompassing 162 stores across 146 cities, covering 1.47 million square feet. The company achieved an average transaction value of Rs 1,038.69 in the last financial year.
Financials
In the nine months ended December 2023, BSRL reported a revenue of Rs 749.3 crore. In fiscal 2023, the revenue was Rs 787.9 crore. It posted a net profit of Rs 28.3 crore during the period, compared to Rs 5.1 crore in FY23, marking a significant turnaround from the losses recorded in FY22 and FY21.
The earnings before interest, taxes, depreciation and amortisation rose to Rs 118.50 crore during the nine-month period, compared to Rs 101.4 crore in fiscal 2023. The Ebitda margin was 15.82%.
BSRL has seen a consistent sales performance across its key categories. In the nine months ended December 2023, apparel sales reached Rs 629.9 crore, while general merchandise contributed Rs 118.5 crore.
The sales mix reveals a strong focus on apparel, which accounted for 84.16% of the total sales, with general merchandise making up the remaining 15.84%.
The company's private label brands have also gained traction, contributing 36.78% to the total revenue, up from 31.64% in the previous year.
Key Risks
High Competition: Operates in a highly competitive retail sector, which may pressure margins and market share.
Dependency on Domestic Market: Heavy reliance on the domestic market could limit growth opportunities and increase vulnerability to local economic fluctuations.
Economic Downturns: Economic slowdowns or changes in consumer spending habits could negatively impact sales.
Regulatory Risks: Changes in retail industry regulations or taxation could affect profitability and operations.
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