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Salient features of the IPO:

* Go Fashion (India) Ltd. (GFIL), which sells women’s bottom-wear under the brand name “Go Colors” is coming up with an IPO to raise Rs. 1,014cr, which opens on 17th Nov. and closes on 22nd Nov. 2021. The price band is Rs. 655 - 690 per share.

* The issue is a combination of fresh and OFS. The company will not receive any proceeds from the OFS part of the issue. Of the net proceeds from the fresh issue, Rs. 33.8cr will be used to fund the roll out of 120 new exclusive brand outlets (EBO); and Rs. 61.4cr will be utilized to fund the working capital requirement of the company. Residual funds will be used for general corporate purposes.

Key competitive strengths:

* Women’s bottom-wear brand in India with well-diversified product portfolio

* Multi-channel pan-India distribution network with a focus on EBOs, enhancing brand visibility 

* Strong unit economics with an efficient operating model

* Extensive procurement base with highly efficient and technologydriven supply chain management

* In-house expertise in developing and designing products

* Demonstrated track record of strong financial performance

Risk and concerns:

* Slowdown in consumer spending

* Re-emergence of another Covid-19 pandemic wave

* Inability in adapting to the rapidly changing customer preferences

* Difficulty in effectively managing and expanding the retail network

* Pressure on profitability

* Competition

Below are the key highlights of the company:

* The women’s apparel market is expected to grow from Rs. 163,291cr in FY20 to Rs. 253,733cr by FY25. This projected growth will be mainly due to an increase in the number of working women, a shift towards aspiration rather than need based buying, design innovation and shift from purchasing sets to buying separates for mix & match of clothing. The share of organized retail in women’s apparel is forecasted to be at 42% by FY25 from 27% in FY20.

* Women’s bottom-wear market amounting to Rs. 13,547cr, contributed 8.3% to the total women’s apparel market. The women’s bottom-wear market is expected to grow at a 12.4% CAGR to reach Rs. 24,315cr by FY25 and will be among the fastest growing categories in women wear. Women bottom-wear products comprise the ethnic, fusion and western categories. Moreover, the share of bottom-wear category in women’s apparel market is anticipated at 9.6% in FY25 as compared to 8.3% in FY20. The branded women’s bottom-wear market is expected to see the continued high growth in the future as well.

* GFIL is the first company to launch a brand exclusively dedicated to the women’s bottom-wear category. Over the period, it has created a direct-to-consumer brand with a diversified and differentiated product portfolio of quality products at competitive prices. The company is one of the key players with a market share of around 8% in the women’s bottom-wear segment (size of Rs. 4,473cr) in FY20.

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