The initial public offering (IPO) subscription for a prominent fashion brand has witnessed remarkable investor response, underscoring the robust appetite for investments in the fashion sector. On the final day of its bidding process, the IPO was oversubscribed by an impressive 12.3 times, signaling strong market confidence in the company’s growth prospects and the fashion industry at large.
The offering garnered bids for 20.78 crore shares against the 1,68,85,964 shares available for subscription, indicating substantial investor interest across various categories. Retail investors displayed significant enthusiasm, with their portion being subscribed 11.4 times. High Net Worth Individuals (HNIs) also showed strong participation, with the non-institutional investors’ (NII) segment booked 30.4 times, marking the highest subscription rate among all investor categories.
Qualified Institutional Buyers (QIBs), while more measured in their initial response, still demonstrated participation with their quota being subscribed 31%. This balanced subscription across retail, HNI, and institutional segments points to a broad-based investor conviction in the fashion brand’s IPO.
Market sentiment further strengthened as the Grey Market Premium (GMP) for the fashion brand’s IPO saw an increase to Rs 268, up from Rs 230 in the unlisted market. This rise in GMP suggests a premium of 56% over the issue price, indicating expectations of strong listing gains and positive post-listing performance.
Prior to the IPO launch, the company successfully raised Rs 330 crore from anchor investors. This was achieved by allocating 68.74 lakh shares to 25 anchor investors, building a solid foundation of institutional backing even before the IPO opened to the public. The shares were allotted at the upper end of the IPO price band of Rs 480 per share, reflecting the high demand and positive outlook. A significant portion of the anchor book, approximately 33.54 lakh shares, was allocated to 10 domestic mutual funds through 18 different schemes, showcasing strong participation from established financial institutions.
Key anchor investors included prominent names such as HDFC MF, Tata MF, Edelweiss MF, LIC MF, and Invesco India, further bolstering the IPO’s credibility and investor appeal. The IPO itself comprised a fresh equity issue of Rs 850 crore and an offer for sale (OFS) of Rs 250 crore, where the promoter group divested a portion of their stake.
The capital raised through the IPO is earmarked for strategic initiatives, including funding the establishment of 12 new retail stores in key markets, debt repayment to strengthen the company’s financial position, and for general corporate purposes to support future growth.
Fashion IPO Price Band and Analyst Recommendations
The fashion brand had set a competitive price band of Rs 456-480 per share for the public offering, with investors able to bid for a minimum lot size of 31 shares. Analysts tracking the IPO expressed a positive outlook, advising investors to subscribe to the issue, citing the company’s strong brand recognition and established presence in the fashion retail landscape.
“Considering the company’s growth trajectory and expansion plans, along with its strong brand recall in the fashion segment, the IPO presents a compelling opportunity for long-term investors. We recommend subscribing to the IPO for both potential listing gains and sustained value appreciation,” noted a leading market analyst.
The fashion brand holds a significant position as a leading retailer in its primary market, boasting a wide network of stores. It has also demonstrated impressive revenue growth and profitability in recent years, driven by increasing consumer demand for fashion apparel and accessories. The company operates numerous stores, including an international presence, with a substantial retail footprint.
Furthermore, the fashion brand has embraced digital innovation by launching a mobile application to enhance customer engagement, provide updates on new collections, and facilitate online shopping, demonstrating a forward-thinking approach to reach and serve its customer base.
In terms of financial performance, the company has exhibited strong growth momentum. For the fiscal year, revenue from operations witnessed a substantial year-on-year jump, accompanied by a healthy increase in profit after tax. This robust financial performance underscores the company’s operational efficiency and market traction.
Leading financial institutions managed the IPO, acting as book running lead managers to ensure a smooth and successful offering. The successful subscription of this fashion IPO highlights the continued vibrancy of the Indian capital markets and the attractiveness of the fashion retail sector to investors.
