Baazar Style Retail IPO day 2: GMP, subscription status, review. Should you apply to this Rekha Jhunjhunwala-backed IPO

The IPO of Baazar Style Retail Limited, backed by Rekha Jhunjhunwala, hit the Indian market last week. Investors have until September 3, 2024 (Tuesday), to subscribe to this public offer. With just two days remaining, it’s a critical time for those interested in applying for the IPO. The price band for the Baazar Style Retail IPO is set between Rs 370 and Rs 389 per equity share, with the company aiming to raise Rs 834.68 crore. The offering includes a fresh issue of shares amounting to Rs 148 crore, while Rs 686.68 crore is allocated for the Offer for Sale (OFS). After the first day of bidding, the IPO has been subscribed 72%.

Baazar Style Retail IPO Grey Market Premium (GMP)

In the grey market, Baazar Style Retail shares are currently trading at a premium of Rs 94. The IPO GMP today stands at Rs 94, indicating a potential listing gain of around 24% for investors, even with two days of subscription left.

IPO Subscription Status

As of 2:42 PM on the second day of bidding, the Baazar Style Retail IPO has been subscribed 3.49 times overall. The retail portion is 3.04 times subscribed, the Non-Institutional Investors (NII) segment is 8.10 times subscribed, and the Qualified Institutional Buyers (QIB) segment is 0.71 times subscribed.

Analysts' Recommendations

Arihant Capital has given a 'subscribe' recommendation, highlighting the company's strong growth prospects. They note that Baazar Style Retail's private label segment, contributing 37.93% of revenue in FY24, is expected to drive future growth. With a CAGR of 23.62%, the company's expansion into high-growth areas and investment in advanced processes and automation are seen as positive factors. The IPO's upper price band of Rs 389 translates to a P/E ratio of 132x based on an FY24 EPS of Rs 2.94.

Master Capital also recommends subscribing to the IPO. They point out that the company’s revenue grew at a CAGR of 33% from FY22 to FY24, compared to the lifestyle and home value retail market’s growth of ~19.3%. While the IPO’s P/E ratio of 135x for FY24 earnings seems high, the EV/EBITDA ratio of 21.5x is considered reasonable against the industry average of 28x.

IPO Details

Following the ‘T+3’ listing rule, the expected allotment date for Baazar Style Retail IPO is September 4, 2024, with the listing date projected for September 6, 2024.

Rekha jhunjhunwala's Involvement

Rekha Jhunjhunwala is offering 2,723,120 equity shares through this IPO, valued at approximately Rs106 crore. Her shares are being sold under the OFS route, as listed in the Red Herring Prospectus available on SEBI's website.

Disclaimer: The opinions and recommendations in this article are provided by individual analysts and do not reflect the views of B2B. Investors should consult certified experts before making any investment decisions.

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