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The initial public offering (IPO) of Baazar Style Retail Limited, backed by prominent investor Rekha Jhunjhunwala, is nearing its end with just one day remaining for investors to apply. The IPO, which opened last week, aims to raise ₹834.68 crore through a mix of fresh issuance and Offer for Sale (OFS). As of the third day of bidding, the IPO has garnered significant interest, exceeding 11.55 times subscription. This strong demand reflects the market's positive sentiment towards Baazar Style Retail's growth prospects.
The grey market, a gauge of investor sentiment, is indicating a potential listing gain for those who secure allotment in the IPO. Baazar Style Retail Limited shares are currently trading at a premium of ₹62 in the grey market, suggesting a potential 16% upside on listing. This premium signifies strong investor confidence in the company's future performance.
Leading financial institutions are recommending investors subscribe to the Baazar Style Retail IPO, citing the company's strong growth trajectory and robust financials. Arihant Capital, in their IPO review, highlights the company's strategic expansion into the private label segment and its focus on operational efficiency. Master Capital, another prominent financial institution, points to the company's impressive revenue growth and a reasonable valuation on an EV/EBITDA basis, further reinforcing their recommendation to subscribe to the IPO.
The IPO, valued at a P/E ratio of 132x based on FY24 earnings, appears expensive at first glance. However, considering the company's strong growth potential and the fact that the industry average for EV/EBITDA is 28x, the IPO's valuation appears reasonable in the long run. The Baazar Style Retail IPO is set to be listed on the stock exchanges on 6th September 2024, after the expected allotment date of 4th September 2024.
Rekha Jhunjhunwala, known for her investment acumen, has contributed to the IPO by offering 2,723,120 equity shares through the OFS route. Her participation in the IPO further strengthens the public offering's appeal and provides investors with another layer of confidence in the company's future prospects.