IPO Update: Go Fashion India Limited

Company Introduction: Established in 2010, Go Fashion is a women’s bottom-wear brand in India that not only designs but also retails its products. Its products are sold under the brand, ‘Go Colors’.

This apparel maker and retailer is now launching its public issue. Here’s all you need to know about this IPO

Go Fashion (India) IPO opened for subscription today as the company looks to raise Rs1,014 crore from the primary market. Apparel brand Go Fashion’s public issue is a mix of a fresh issue of equity shares and an offer for sale (OFS) by existing shareholders of the company. The issue is offered to investors in a fixed price band of Rs 655-690 per share from today.

IPO Timeline

    Application start

17-11-2021

Application end

22-11-2021

Allotment begins

25-11-2021

Refund Initiation

26-11-2021

Allotment date

29-11-2021

Listing on exchange

30-11-2021

Key Strengths

• Wide range of products as compared to it's competitors 

• Strong retail presence through brand outlets, large store formats, multi-brand outlets and even online.

• Company's store count rose from 70 outlets in 2015 to 450 outlets 2021 indicating aggressive rollout and wider outreach.

• The average selling price of Go Colors of about ₹ 600 per piece helps it cater across income segments and penetrate deeper in Tier 3 and 4 towns.

• The company has implemented end-to-end automation for inventory operation which helps the  company to avoid stock out and ensure sufficient supply at stores.

• Demonstrated strong track record of financial performance. In the FY20, the company’s ROCE was the highest among all major retail led women’s apparel brands in India.

Key Weaknesses

• Company's dependency on a single brand and product strategy. 

• Impact of the pandemic is one of the risk for the company. Go Fashion had to shut down, both temporarily and permanently, many of its stores and kiosks at different locations.  

• Its six trademarks are still pending for registration and a lack of protection could mean third-party infringement. 

• Fashion trends change rapidly. A sudden deviation in consumer preferences could make the business redundant. 

• Go Fashion does not own any manufacturing facilities and depends on suppliers and job workers to produce its products. Any disruption in their work could impact the output of the business. 

Business Growth Opportunities

• While the overall women’s bottom-wear market is expected to grow at about 12%, organized market is expected to grow at a faster clip of 24% CAGR between 2020 and 2025.

• The size of organized women bottom-wear market is expected to reach ₹9,200 crore by 2025.

• Leveraging its own online platform and e-commerce channels can help the company grow its customer base further.

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