Baazar Style IPO opens on August 30: Check price band, lot size and other key details

Rekha Jhunjhunwala-backed value retailer Baazar Style Retail will launch its initial public offering on August 30, 2024, to raise around ₹834.68 crore. The IPO will remain open for subscription until September 3, 2024.

Style Baazar Retail Ltd, which operates retail stores under the brand name Style Baazar, announced the price band for the IPO on August 26, at ₹370 to ₹389 per share.

The company garnered ₹37 crore from venture capital fund Volrado Ventures Partners Fund II in a pre-IPO round earlier this month.

Baazar Style Retail IPO offer size

The company's initial public offer, which operates retail stores under the ‘Style Baazar’ brand, consists of a fresh issue of shares worth up to ₹148 crore and an offer-for-sale (OFS) of 1.77 crore shares worth up to ₹686.68 crore.

Rekha Rakesh Jhunjhunwala will divest 27.23 lakh equity shares through the OFS route while Intensive Softshare Pvt Ltd is selling 22.4 lakh shares. Intensive Finance Pvt Ltd will also offload 14.87 lakh shares.

Among promoters, Madhu Surana is selling up to 964,858 shares, Subroto Trading & Finance Company Private Limited is selling up to 9,19,156 shares, and Rekha Kedia is selling 7,50,000 shares.

In total 18 existing shareholders, including nine promoter entities, are divesting stakes through the OFS route.

The minimum lot size is 38 shares for the retail investors, aggregating to an investment of ₹14,782.

Baazar Style Retail IPO key dates

Style Baazar's IPO subscription will remain open from August 30 to September 3. The company is expected to finalise the IPO allotment status on September 4. On September 5, Style Baazar will initiate refunds and credit shares to the demat accounts.

Baazar Style Retail IPO listing date has been tentatively fixed as September 6. Shares of Baazar Style Retail Limited will be listed on both the NSE and BSE.

Baazar Style Retail IPO risk factors

The company’s stores are concentrated in eastern parts of the country like Odisha and West Bengal states and any adverse development can affect its operations in these states which could affect its revenue and net profits.

The company derives the majority of its revenue from the sale of apparel and merchandise products. Any change in consumer preferences can also affect its operations.

The company is in the process of implementing its e-commerce initiative to capture an additional customer base and provide its existing customers with a new shopping experience. If it fails to successfully implement the e-commerce initiative, the business and results of operations could be adversely impacted.

Baazar Style Retail IPO objective

Baazar Style Retail has proposed using IPO proceeds from the fresh issue component to prepay or repay all or a portion of certain outstanding borrowings.

As of June 30, 2024, the company’s total outstanding borrowings amounted to ₹153.476 crore. The company will utilise ₹146 crore of the IPO proceeds for prepayment of outstanding dues. Also, it will utilise ₹32.2 crore from the proceeds of the pre-IPO placement for debt prepayment.

The fund flows from the OFS route will go to selling shareholders, and the company will not receive anything from that.

About Baazar Style Retail

Baazar Style Retail Limited is a value fashion retailer in the eastern parts of the country. The company has up to a 3% market share in the organised value retail market in West Bengal and Odisha. As per The Technopak Report, it had the largest retail footprint in Eastern India compared to the Listed Value Retailers in fiscal 2024.

As of March 31, 2024, the company operated 162 stores spread across nine states. A majority of its stores are operated under the ‘Style Bazaar’ brand name.

The company reported consolidated revenue from operations of ₹972.8 crore for the fiscal ended March 31, 2024, while profit after tax stood at ₹21.942 crore.

Between FY22 and FY24, the company saw a 20% CAGR rise in its revenue from operations. Moreover, the eastern states are the fastest growing consumer markets for value retail, with an expected market size of ₹2,208 billion and expected to grow at a CAGR of 15% by FY27, which could benefit the company.