Go Fashion India IPO: Will this apparel player make a strong debut at the bourses?

5 August 2022
4 mins read
Go Fashion India IPO: Will this apparel player make a strong debut at the bourses?

India’s one of the leading women’s apparel brands has launched its offering starting today, 17th November 2021. ‘Go Fashion’ is a well-known brand amongst women recognized for its vivid heterogeneity with more than 50 variants of their products available in 120+ colors. The company manufactures and sells these bottom-wears in the brand name of ‘Go Colors’.

Here are some of the details relating to Go Fashion IPO:

  • The size of this offering is Rs.1,013 crore comprising more than 12 million shares.
  • Go Colors IPO price bandis set from Rs. 655 to Rs. 690 for a subscription.
  • The application process goes live from 17th November 2021 up to 22nd November 2021.
  • FV of the stock is set to Rs. 10 per unit.
  • Each lot they offer comprises 21 shares.
  • BSE and NSE, both the exchanges will offer the listing to this stock.

Key Highlights About the Company

To understand the strength with which this stock can make its listing on the exchanges, let us know some of the key highlights of Go Fashion IPO mentioned hereunder:

  • Go Colors has its establishments across the country with over 100 stores operating in multiple cities along with their tie-ups with online retail sellers.
  • The financial status of the company as per the audited books of accounts indicates strong numbers and future growth possibilities.
  • After the downfall in sales when the lockdowns and global slowdown had triggered, the company witnessed low demand. Despite that, Go Fashion has staged a strong comeback.
  • The brand has very effective operations and its team manages the manufacturing and supply of products very efficiently.

SWOT Analysis

Here is the summary of the company’s strengths, weaknesses, opportunities, and threats that concern the interest of prospective shareholders and ultimately the listing of its shares.

1. Strengths:

  • Wide Range of Products: The company understands the demand for women’s apparel and offers a large variety of products in vivid colors and styles to match the requirement of the majority of the consumers.
  • Financially Strong: The audited numbers disclosed in the financial statements of the company are good despite a loss in the financial year 2020-21 which was mainly so due to the Covid-19 pandemic.

2. Weakness:

  • Lack of Popularity: The brand has some loyal customers but there is a lack of popularity like some big names in the fashion brand. This lack of fame has a direct relation with the turnover number it can achieve. So that remains one point of weakness for the company.

3. Opportunities:

  • Booming Fashion Industry:

The fashion industry in India is ever-growing and this company, with its product lists, could have good future opportunities. The brand also has plans to expand which will take care of the additional demand it could get.

  • Industry growth:

As per the reports, India’s apparel market could see exponential growth in the coming years. By the end of five years starting from 2020 to 2025, the growth rate of this industry is expected to reach around 9%, the industry experts believe.

4. Threats:

  • Duplicacy:

In any industry, competition is the biggest threat to the business. The apparel industry is no exception. This industry has a lot of duplication and Go Fashion deals with the same problems.

  • Stiff Competition:

The competition in this clothing industry is tough and Go Fashion has some big names to compete with. As the industry grows bigger, this can get tough in the future.

Analysis of Peers from the Industry

Here is the presentation of some numbers to give more clarity on the industry date we just discussed and the fundamental analysis of the key competitors that could impact the listing of Go Colors IPO:

Peers FV of Share Industry PE Market Capitalization Dividend Yield Ratio
Thomas Scott Rs.10 76 times Rs.7 cr
Trent Re.1 146 times Rs.40,851 cr 0.05
AB Fashion Rs.10 146 times Rs.26,625 cr
TCNS Rs.2 7.75 times Rs.5,050 cr
Future Lifestyle Rs.2 146 times Rs.1,090 cr
Arvind Rs.4 76 times Rs.4,454 cr

In Nutshell

The above analysis will help you understand the fundamentals of the company better and help you gauge if the listing of its shares will make a strong debut on the exchanges or not. Based upon this analysis, you can decide whether to apply for Go Fashion IPO or not.