Baazar Style Retail Ltd. will use the majority of the funds raised through its initial public offering for repayment of its existing debts, Chairperson Pradeep Agarwal said.
The value fashion retailer, which operates Style Baazar, is looking to raise Rs 834.6 crore via a public issue, which entails a fresh issue of Rs 148 crore, according to the red herring prospectus.
Out of the fresh issue, Rs 98 crore will go to finance its existing debt, and Rs 50 crore will be used for general proceeds, Agarwal said. The company has also raised Rs 37 crore via pre-IPO placement, which was used to fund the loans.
The company, in which Rekha Jhunjhunwala owns a stake, started its journey in 2013 to cater to the needs of aspirational Indians in Tier II and Tier III cities. It has become the fastest-growing fashion retailer both in terms of store count and operations, Managing Director Shreyans Surana said.
"We try to open stores in a state by creating a decent presence in the state," Surana said. "We try to understand the catchment and their festival requirements. Then, we plan the assortment."
In the last financial year, Style Baazar opened 162 stores across 148 cities. It is majorly present on the eastern side of the country. West Bengal, Odisha, and Bihar are core markets. Tripura, Chhattisgarh, Jharkhand and Uttar Pradesh are other priority markets.
The company targets people with income less than Rs 4 lac per annum. The average transaction value of Style Baazar is Rs 1,038. The average selling price is Rs 399. The lower pyramid, from where 90% of the masses come, wants value and fashion both together, according to Surana.
Style Baazar tries to build inventory and pricing according to their needs. We put pricing at a level, which is affordable and fashionable both.Shreyans Surana
When Style Baazar plans an assortment for a store, first the catchment is observed. The company creates a pyramid, which consists of entry price points and premium price points. A premium section is created during the festive season. And throughout the year, it has entry price points and popular price points, Surana said.
For design and display, Style Baazar has a network of vendors across India and a team of designers within the company working on a daily basis. They create and curate design, cooperate with the vendors and try to bring fashion from all over the country, he added.
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