Baazar Style IPO - Valuation, Financials, Strengths, Risks And More: Anand Rathi

Anand Rathi Report

Baazar Style Retail Ltd. launched its initial public offering today for subscription and closes on Sep. 03. A top value fashion retailer in Eastern India, has set a price band in the range of Rs 370–389 per share.

The Rs 834.7 crore 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.

Object of the issue

• Prepayment or repayment of all or a portion of certain o/s borrowings.

• General corporate purposes.

Valuation and outlook

Baazar style retail is one of the leading players in the value retail market in West Bengal and Odisha. The company is well focused to cater to the needs of aspirational Indians with affordable pricing only in Tier II and Tier III cities.

It has shown resilience and growth following a challenging fiscal year 2022, impacted by the pandemic. The company has successfully turnaround, reporting improvements in both revenue and profit margins. This recovery was led by efficient cost control measures and business efficiency across its operations.

At the upper price band company is valuing at P/E of 132.1 times with a market cap of Rs 29,030 million post issue of equity shares and return on net worth of 10.7%.

On the valuation front, we believe that the company is richly priced. However, considering all its business prospects and stable financial performance we recommend a “Subscribe” rating to the IPO with higher risk appetite.

Click on the attachment to read the full IPO report:

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