Please refer to important disclosures at the end of this report
1
Incorporated in 2010, Go Fashion (India) Limited is one of the largest women's
bottom-
wear brands in India. The company is engaged in the development,
design, sourcing, marketing, and retailing of a range of women's bottom-
wear
products under the brand, 'G
o Colors'. The company offers one of the widest
portfolios of bottom-
wear products among women's apparel retailers in terms of
colors and styles. Go Fashion serves their customers primarily through their
extensive network of 459 exclusive brand outlets (“E
BOs”) (including 12 kiosks
operated on a “company owned and company operated” (“COCO”) model and
11 franchise stores) that are spread across 23 states and union territories in
India, as of September 30, 2021.
Positives: (a) One of the largest women's bottom-wear brands in India (b)
Wide,
well-diversified, product portfolio and first-mover advantage (c)
the company has
459 exclusive brand outlets (EBOs) that are spread across 23 state
s and union
territories in India (d) Strong financial performance record.
Investment concerns: (a) Increase in competition (b)
Slowdown in the economy
could impact the overall revenue of the company.
Outlook & Valuation:
In terms of valuations, the post-issue FY20 EV/EBITDA works out -
30.2x to (at
the upper end of the issue price band), which is almost in similar
range
compared to its peers TCNS Clothing Co. (FY20 EV/EBITDA -
29.3x). Further, Go
Fashion India has better track record of
revenue growth, higher operating
margin & high Return on equity compared to TCNS Clothing Co.
Considering
all the positive factors, we believe this valuation is at reasonable levels.
Thus, we
recommend a subscribe rating on the issue.
Key Financials
Y/E March (Rs cr)
FY2019
FY2020
FY2021
1QFY21
1QFY22
Net Sales
293
406
268
10
31
% chg
-
38.7
(34.0)
-
200.8
Net Profit
31
53
(4)
9
(19)
% chg
-
130.0
92.2
-
-
OPM (%)
27.7
31.5
17.7
(147.6)
(19.1)
EPS (Rs)
5.9
10.1
(0.7)
-
-
P/E (x)
116.4
68.4
-
-
P/BV (x)
15.8
12.6
12.7
-
RoE (%)
13.5
18.4
(1.3)
-
RoCE (%)
12.8
16.4
(2.5)
-
EV/Sales (x)
12.6
9.3
14.0
-
EV/EBITDA (x)
45.6
29.4
79.0
-
Angel Research; Note: Valuation ratios based on pre-issue outstanding shares and at upper end
of the price band
Subscribe
Issue Open: Nov 17, 2021
Issue Close: Nov 22, 2021
Offer for Sale: `888.6cr
QIBs 75%
Non-Institutional 15%
Retail 10%
Promoters 52.8%
Public 47.2%
Fresh issue: `125cr
Issue Details
Face Value: `10
Present Eq. Paid up Capital: `52.2cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `54.0cr
Issue size (amount): `1,014cr
Price Band: `655-690
Lot Size: 21 shares
Post-issue mkt.cap: ` 3,544*– 3,727cr**
Promoter holding Pre-Issue: 57.5%
Promoter holding Post-Issue: 52.8%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Amarjeet S Maurya
+022 40003600, Extn: 6831
amarjeet.maurya@angelbroking.com
Go Fashion (India) Limited
IPO Note |
Retail
November, 16
, 2021
Go Fashion (India) Ltd | IPO Note
November 16, 2021
2
Company background
Go Fashion (India) Limited (“Go Fashion”) was incorporated on September 9, 2010.
Go Fashion is among the largest women’s bottom-wear brands in India, with a
market share of approximately 8% in the branded women’s bottom-wear market in
Fiscal 2020. They are engaged in the development, design, sourcing, marketing
and retailing a range of women’s bottom-wear products under the brand, ‘Go
Colors’.
The company offers one of the widest portfolios of bottom-wear products among
women’s apparel retailers in India in terms of colours and styles. As of September
30, 2021, they sold bottom-wear in over 50 styles in more than 120 colours.
Go Fashion serves their customers primarily through their extensive network of 459
exclusive brand outlets (“EBOs”) (including 12 kiosks operated on a “company
owned and company operated” (“COCO”) model and 11 franchise stores) that are
spread across 23 states and union territories in India, as of September 30, 2021.
In addition, their distribution channels include large format stores (“LFSs”) including
Reliance Retail Ltd, Central, Unlimited, Globus Stores Pvt Ltd and Spencer's Retail
among others. As of September 30, 2021, they have 1,270 LFSs. In addition, they
sell their products through their own website and online marketplaces and through
multi-brand outlets (“MBOs”).
Issue details
Go Fashion India
is raising
₹
1,013.6
cr through fresh issue (
`
125
cr) and
Promoter & investors are selling equity share 1.3
cr through offer for sale in the
price band of ₹655-690.
Exhibit 1: Pre and post IPO shareholding pattern
No of shares (Pre-issue) % (Post-issue)
%
Promoter
30,000,000
57.5%
28,505,942
52.8%
Public
22,197,390
42.5%
25,503,042
47.2%
Total
52,197,390 100.0%
54,008,984
100.0%
Source: Source: RHP, Note: Calculated on upper price band
Objectives of the Offer
Funding roll out of 120 new EBOs (Exclusive Brand Outlets) -₹33.7cr;
Funding working capital requirements -₹61.45r and
General corporate purposes
Go Fashion (India) Ltd | IPO Note
November 16, 2021
3
Exhibit 2: Income Statement
Y/E March (` cr)
FY2019
FY2020 FY2021
Net Sales
293
406
268
% chg
38.7
(34.0)
Total Expenditure
212
278
220
Raw Material
94
130
92
Personnel
42
62
61
Others Expenses
75
86
67
EBITDA
81
128
47
% chg
58.2
(62.9)
(% of Net Sales)
27.7
31.5
17.7
Depreciation& Amortisation
32
47
61
EBIT
49
82
(13)
% chg
66.9
(116.0)
(% of Net Sales)
16.7
20.1
(4.9)
Interest & other Charges
12
18
22
Other Income
6
5
32
(% of PBT)
13.6
7.1
(1,006.1)
Share in profit of Associates
-
- -
Recurring PBT
42
68
(3)
% chg
61.8
(104.6)
Tax
11
16
0
(% of PBT)
26.7
22.9
(12.7)
PAT (reported)
31
53
(4)
Basic EPS (`)
5.9
10.1
(0.7)
% chg
70.1
(106.7)
Source: Company, Angel Research
Go Fashion (India) Ltd | IPO Note
November 16, 2021
4
Balance Sheet
Y/E March (` cr)
FY2019
FY2020 FY2021
SOURCES OF FUNDS
Equity Share Capital
43
50
53
Reserves& Surplus
429
474
427
Shareholders Funds
472
524
480
Total Loans
96
646
645
Deferred Tax Liability
17
12
11
Total Liabilities
587
1,182
1,134
APPLICATION OF FUNDS
Net Block
719
1,161
1,084
Capital Work-in-Progress
21
21
30
Investments
-
16
27
Current Assets
355
186
208
Inventories
38
47
48
Sundry Debtors
22
5 8
Cash
186
39
50
Loans & Advances
16
74
75
Other Assets
92
20
28
Current liabilities
508
202
215
Net Current Assets
(153)
(16) (7)
Deferred Tax Asset
-
-
-
Total Assets
587
1,182
1,134
Source: Company, Angel Research
Go Fashion (India) Ltd | IPO Note
November 16, 2021
5
Cash Flow Statement
Y/E March (` cr)
FY2019 FY2020 FY2021
Profit before tax
42
68
(3)
Depreciation
32
47
61
Change in Working Capital
(42)
(53)
63
Interest / Dividend (Net)
9
13
(10)
Direct taxes paid
(17)
(20)
(0)
Others
8
3
(20)
Cash Flow from Operations
33
57
90
(Inc.)/ Dec. in Fixed Assets
(26)
(28)
(10)
(Inc.)/ Dec. in Investments
21
10
(37)
Cash Flow from Investing
(5)
(18)
(47)
Issue of Equity
0
0
0
Inc./(Dec.) in loans
(20)
(27)
(17)
Dividend Paid (Incl. Tax)
0
0
(0)
Interest / Dividend (Net)
(11)
(16)
(20)
Cash Flow from Financing
(31)
(44)
(37)
Inc./(Dec.) in Cash
(3) (5)
5
Opening Cash balances
5
2
(3)
Closing Cash balances
2
(3)
3
Source: Company, Angel Research
Go Fashion (India) Ltd | IPO Note
November 16, 2021
6
Key Ratios
Y/E March FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
116.4
68.4
NA
P/CEPS
57.1
36.3
63.2
P/BV
15.8
12.6
12.7
EV/Sales
12.6
9.3
14.0
EV/EBITDA
45.6
29.4
79.0
EV / Total Assets
9.7
7.6
7.3
Per Share Data (Rs)
EPS (Basic)
5.9
10.1
(0.7)
EPS (fully diluted)
5.9
10.1
(0.7)
Cash EPS
12.1
19.0
10.9
Book Value
43.7
54.9
54.2
Returns (%)
ROCE
12.8
16.4
(2.5)
Angel ROIC (Pre-tax)
15.5
17.9
(3.0)
ROE
13.5
18.4
(1.3)
Turnover ratios (x)
Asset Turnover (Net Block)
1.6
1.6
1.0
Inventory / Sales (days)
88
97
115
Receivables (days)
50
50
64
Payables (days)
18
10
17
Working capital cycle (ex-cash) (days)
119
136
162
Source: Company, Angel Research
Go Fashion (India) Ltd | IPO Note
November 16, 2021
7
Research Team Tel: 022 - 40003600
E-mail: research@angelbroking.com
Website: www.angelone.in
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Disclosure of Interest Statement
1.Financial interest of research analyst or Angel or his Associate or his relative No
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Ratings
(Based
on
expected
returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral
(
-
5
to
5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15%)
Hold
(Fresh
purchase
not
recommended)
