Go Fashion (India) Limited IPO (GoColors IPO)

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i. The company is engaged in the development, design, sourcing, marketing and retailing a range of women’s bottom-wear products under the brand, ‘Go Colors’. They are among the few apparel companies in India to have identified the market opportunity in women’s bottom-wear and have acted as a ‘category creator’ for bottom-wear.

ii. It is the first company to launch a brand exclusively dedicated to women’s bottom-wear category and have leveraged this advantage to create a direct-to-consumer brand with a diversified and differentiated product portfolio of premium quality products at competitive prices. As of May 31, 2021, Go Colors sold bottom-wear in over 50 styles in more than 120 colors.

iii. Their bottom-wear products include churidars, leggings, dhotis, harem pants, patiala, palazzos, culottes, pants, trousers and jeggings, are sold across multiple categories such as ethnic wear, western wear, fusion wear, athleisure, denims, plus sizes and girls wear making our portfolio ‘universal’ and for every occasion. These factors, coupled with the lack of seasonality, ensure that their portfolio is resistant to redundancy from fashion trends.

iv. The company has 450 exclusive brand outlets (EBOs) that are spread across 23 states and union territories in India. The company’s distribution channels include large format stores (LFSs) including Reliance Retail Limited, Central, Unlimited, Globus Stores Private Limited, and Spencer’s Retail among others. The company’s LFSs have grown from 925 LFSs in 2019 to 1,332 LFSs in May 2021. The company also sells its products through its website, online marketplaces, and multi-brand outlets (MBOs).

Competitive Strengths
i. Well-diversified product portfolio
ii. Multi-channel pan-India distribution
iii. Strong unit economics

Objects of the Go Fashion (India) Limited IPO (GoColors IPO):

The Offer comprises the Fresh Issue and the Offer for Sale. The Company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects: 1. Funding roll out of 120 new EBOs 2. Funding working capital requirements 3. General corporate purposes.

Go Fashion (India) Limited IPO (GoColors IPO) Details:

Open Date: Nov 17 2021
Close Date: Nov 22 2021
Total Shares: 14,689,983
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 1,013.61 Cr.
Lot Size: 21 Shares
Issue Price: ₹ 655-690 Per Equity Share
Listing At: NSE,BSE
Listing Date: Nov 30 2021

Promoters And Management:

i. Prakash Kumar Saraogi, is the Managing Director of the Company. He is a promoter of the Company and has over 28 years of experience in garment manufacturing, fashion industry and retail industry. He holds a bachelor’s degree in chemical engineering from Anna University, Chennai. ii. Gautam Saraogi, is an Executive Director and the Chief Executive Officer of the Company. He is a promoter of the Company and has over 10 years of experience in consumer retail, marketing, brand building and garment manufacturing. He holds a bachelor’s degree in commerce from University of Madras, Chennai and an executive diploma in marketing management from Loyola Institute of Business Administration, Chennai. He has received a token of appreciation for his contribution to the Chennai Retail Summit 2018. iii. Rahul Saraogi, is a Non-Executive Director of the Company. He is a promoter of the Company and has over 10 years of experience in the garment industry. He holds a bachelor’s degree in science from University of Pennsylvania, Philadelphia, United States. He is the founder director of Atyant Capital Advisors Private Limited.

Financials of Go Fashion (India) Limited IPO (GoColors IPO):

Particulars (in Millions) Mar 21 Mar 20
Income 2,507 3,920
Cost of Material Consumed 488 1,062
Purchases of Stock in Trade 218 604
Changes in Inventories 214 -367
Subcontracting Charges 118 275
Employee Benefits Expenses 614 619
Other Expense 388 460
Operating Profit 463 1,265
OPM% 18% 32%
Other income 315 48
Finance costs 205.69 164.72
Depreciation 604.99 465.72
Profit Before tax -31.35 682.86
Profit After Tax -34 524.22
EPS -0.68 10.08

Comparison With Peers:

Company has shown Page Industries, Trent and TCNS clothings is its peers.
Peers Revenue (Cr) PAT (Cr) P/E
Page Industries 2833 341 103
Trent 2593 -146 500
TCNS 636 -56 NA
Go Fashion 250 -34 NA
The impact of COVID-19 is seen in the above companies. The data of FY21 is taken for analysis.

Recommendation on Go Fashion (India) Limited IPO (GoColors IPO):

Review and Recommendation of Go Colours  IPO by InvestorZone is 4/10 1. Go-Colour has ~8% market share in FY20 in branded women's bottom market. They sells products via EBO including franchise stores, large format stores, multi-brand stores and online website. 2. They currently employed 2855 employees, source raw materials from 73 suppliers, finished products from 5 suppliers. They do not have their own manufacturing units. They outsource work to the workers. 3. Company was doing good till last year when covid-19 hit the world. Till date the company is not able to recover from COVID-19 impact and it is  still in loss as on 30.06.2021. 4. Mcap = 3700 Cr (Post-IPO). So, Mcap/Sales = 13x (which looks fully priced as compared to its peers).

Lead Manager of Go Fashion (India) Limited IPO (GoColors IPO):

  1. ICICI Securities Limited
  2. JM Financial Consultants Private Limited

Registrar of Go Fashion (India) Limited IPO (GoColors IPO):

  1. Kfin Technology Private Limited

Company Address:

Go Fashion (India) Limited Sathak Center, 5th Floor, New No. 4, Old No. 144/2, Nungambakkam High Road, Chennai, Tamil Nadu 600 03 Phone: +91 44 4211 1777 Email: companysecretary@gocolors.com Websitehttps://www.gocolors.com/

Discussion on Go Fashion (India) Limited IPO (GoColors IPO):


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