Go Fashion (India) Ltd, owner of women's wear brand Go Colors has opened the initial public offering (IPO) subscription from today which will remain open till 22nd November 2021. The company has issued a ₹ 1,014 crores of public offering at a fixed price zone of ₹ 655-690 per share. The bidding date is extended because of the market holiday on Friday, November 19 owing to Guru Nanak Jayanti.
A fresh release of equity shares equating to ₹ 125 crores and an offer for sale (OFS) of up to 12,878,389 equity shares by the promoters and the existing shareholders of the firm is being included in this IPO.
Go Fashion IPO GMP (grey market premium) today has reached ₹560, which is ₹30 higher than yesterday's GMP of ₹530. On Monday, its IPO GMP had surged from ₹430 to ₹530, logging a ₹100 increase in its share price in the grey market. Market experts say that the increase in Go Fashion’s IPO Grey market premium may attract a strong response from the bidders because for some bidders grey market numbers are a serious business.
What does this GMP mean?
Market observers have stated that GMP indicates an estimated listing profit from the public issue, which means that Go Fashion IPO GMP on Wednesday is Rs 560 that might go up by around ₹1250 ( ₹690 + ₹560) in the grey market. That is about 80% higher from the price band of ₹655 to ₹690 per equity share.
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Key things to know about Go Fashion IPO:-
- As per the OFS, PKS Family Trust and VKS Family trust will reportedly sell off 7.45 lakh equity shares each, Sequoia Capital India Investments will sell 74.98 lakh shares, India Advantage Fund S4 I will sell up to 33.11 lakh shares and Dynamic India Fund S4 US I will sell up to 5.76 lakh shares.
- At present, both PKS and VKS Family Trusts hold 28.74 percent share each in the company, Sequoia Capital holds 28.73 percent share, India Advantage Fund has 12.69 percent share and Dynamic India Fund owns a 1.1 per cent stake in the firm.
- Till date, Go Fashion has been able to raise over Rs 456 crore from anchor investors.
- Go Fashion will be allocating a total amount of 66,10,492 equity shares to 33 anchor investors at ₹ 690 each. This would come to a sum total of ₹ 456.12 transaction size, as per a circular uploaded on the BSE website.
- At least 75% of the issue size is reserved for qualified institutional buyers (QIBs), 15% has been reserved for non-institutional investors. The remaining 10% has been kept aside for retail investors.
- A bid of a minimum of 21 equity shares can be initiated by the investors that could multiply thereafter.
- JM Financial, DAM Capital Advisors (Formerly IDFC Securities) and ICICI Securities are the leading managers of IPO issues.
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Avinash Gorakshkar, Head of Research at Profitmart Securities has suggested bidders keep the company’s financials in mind while making a bid instead of the grey market premium. "Grey market premium is not a guarantee for listing gain. So, one should look at the financials of the company. The public issue is almost OFS in nature (out of ₹1013.61 crores, only ₹125 will come from fresh issues) and the valuations of the issue are also higher,” he said.
He further said that one can expect it to be a trend in the issue looking up to the recent buzz in the textile sector. “So, bidders are advised to go by the balance sheet of the company very minutely rather relying on the GMP,” he added.