IPO Note - Go Fashion (India) Ltd By Religare Broking Ltd
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Go Fashion (India) Ltd.
About the Company
Go Fashion (India) Ltd is a women’s bottom-wear brand in India, with a market share of ~8% in the branded women’s bottom-wear market in FY20. They are engaged in the development, design, sourcing, marketing and retailing of a range of women’s bottom-wear products under the brand, ‘Go Colors’. They offer one of the widest portfolios of bottom-wear products among women’s apparel retailers in India in terms of colors and styles, as of July 2021. As of September 30, 2021, they sold bottom-wear in over 50 styles and more than 120 colors. They design their products to cater to women across all age groups and girls and their products fit are suitable to various body types and physiques.
The company’s products portfolio is universal and for every occasion and sold across multiple categories such as ethnic wear, western wear, fusion wear, athleisure, denim and plus sizes.
Objects of the Issue
* Funding roll out of 120 new Exclusive Brand Outlets (EBOs);
* Funding working capital requirements;
* General corporate purposes.
Valuation
The women’s apparel market is estimated to be ~36% of the total apparel market while the women’s bottom-wear market contributed 8.3% of the women’s apparel market with a size of Rs 1,35,470mn in FY20. This is further expected to grow at a CAGR of 12.4% to reach Rs 243,150mn by FY25 largely driven by the growing female population, increasing number of working women, evolving fashion trends and rising spending power of consumers. The organized share of women’s bottom-wear market is expected to reach a share of ~38% in FY25 with a CAGR of 24.3%.
We believe Go Fashion is well placed in the segment as it has a first-mover advantage and only company to launch products dedicated to women’s. They have a strong multi-channel pan-India distribution network and have undertaken brand-building initiatives to gain visibility. The company designs the products in-house keeping in mind the latest trend and the quality of the products. Going forward, the company has plans to focus on product launches and innovation and expand its retail network via EBOs. Besides, their focus remains on increasing same store sales growth and sales through online channel which will aid in driving future growth.
On the financial front, the company’s performance till FY20 was strong but the company incurred losses in FY21 due to Covid-19 and higher expenses. Also, it has a strong balance sheet and decent cash flow. Going ahead, its financials are expected to improve with innovation, expansion, strong brand recall and operating efficiency. From a long term perspective, we have a positive view on the company.
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SEBI Registration number is INZ000174330
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