| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 370 to ₹ 389 | 38 | 30th Aug, 2024 – 03nd Sep, 2024 | ₹834.68 Cr |
About Baazar Style Retail Ltd IPO
Baazar Style Retail Ltd. (BSRL), founded in June 2013 in Kolkata, is a major player in the value fashion retail sector, offering affordable apparel and general merchandise. Known for its “Quick Shop One Stop” concept, BSRL serves a diverse customer base with products including home furnishings. It operates 162 stores across 146 cities, holding the largest retail footprint in Eastern India among listed value retailers, with 3.0% market share in West Bengal and 2.2% in Odisha. BSRL has been the fastest-growing value retailer from 2017 to 2024 in terms of store count and revenue, with private label brands contributing 37.9% to revenue. The company boasts an Average Transaction Value of Rs. 1,039, the second highest among listed value retailers in India, and has achieved 33.7 million unit sales in FY24. Its expansion strategy includes significant store openings in key markets such as West Bengal, Odisha, and Bihar, supported by internal accruals, debt, and private equity. The average store size is 9,046 square feet, with Sales Per Square Foot of Rs. 7,758 in FY24. With the highest EBITDA margin of 14.6% among its peers, BSRL is well-positioned to capitalize on the growing value retail market in Eastern and North-Eastern India.
Objective of the Baazar Style Retail Ltd IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company;
- General corporate purposes.
Rationale To Invest In Baazar Style Retail Ltd IPO
Leading value retailer in Eastern India with rapid cluster-based expansion and 3.0% market share in West Bengal and 2.2% in Odisha
BSRL has distinguished itself as a prominent value retailer in Eastern India, demonstrating significant growth. The company has achieved an impressive CAGR of 35.8% in store count and 26.8% in revenue during FY17 to FY24, expanding its footprint to 162 stores across nine states by March 31, 2024. BSRL’s revenue reached Rs. 9,728.82 mn in FY24, with a CAGR of 32.9% during FY22 to FY24, outpacing the overall lifestyle and home value retail market’s 19.3% CAGR. Its market share stood at 3.0% in West Bengal and 2.2% in Odisha, with core markets like West Bengal, Odisha, Assam, and Bihar accounting for 87.6% of its revenue. BSRL employs a cluster-based expansion strategy, opening new stores near existing ones to enhance operational efficiency and market penetration. The company’s focus on high-street locations, a wide range of quality merchandise, and tailored local customer engagement has been effective, reflected in a low store closure rate of just 14 stores over the past three years. This strategic growth approach has solidified BSRL’s competitive edge and market position in the burgeoning Eastern and North-Eastern retail sectors.
Strategic product assortment and private label success enhance customer loyalty and profitability
BSRL boasts a diverse product portfolio that includes apparel, cosmetics, imitation jewelry, consumer appliances, houseware products, and bags, catering to a wide range of customer segments from men and women to children and youngsters. In FY24, the company achieved a high Average Transaction Value of Rs. 1,038.7, reflecting its success in meeting customer preferences. BSRL effectively combines private label brands – such as Square Up, Awaya, and Miss19 – with third-party brands, with private labels contributing 37.9% to total revenue. These private labels have seen exceptional growth, with a CAGR of 64.6% from FY22 to FY24, driven by their focus on high-quality, trendy, and affordable merchandise tailored to local demand. This strategy has fostered customer loyalty, evidenced by a 71.9% repeat purchase rate in FY24. BSRL’s robust supply chain, managed through 641 suppliers and 1,226 vendors, and advanced inventory management – enhanced by data analytics tools like Tableau – has improved operational efficiency. This is highlighted by reduced inventory turnover days and increased sales per square foot. BSRL’s integrated approach to product assortment, private label development, and supply chain management has reinforced its position as a comprehensive solution for family needs, boosting both customer satisfaction and financial performance.
Valuation of Baazar Style Retail Ltd IPO
BSRL, a leading one-stop shop in Eastern and North-Eastern India, has achieved substantial growth, increasing its store count to 162 across nine states, registering a CAGR of 35.8% during 2017-24 period. This expansion has enabled BSRL to capture significant market share of 3.0% in West Bengal and 2.2% in Odisha in the organized value retail sector. The company’s cluster-based expansion strategy has been instrumental in its recovery from the pandemic, driving a 23% revenue increase from Rs. 7,879 mn in FY23 to Rs. 9,729 mn in FY24, with around 38% of this revenue coming from private labels. Net profit also grew substantially, from Rs. 51 mn in FY23 to Rs. 219 mn in FY24. Currently, BSRL has a total debt of Rs. 1,782 mn, comprising Rs. 291 mn in current borrowings and Rs. 1,491 mn in non-current borrowings, with plans to reduce this debt. Despite these strengths, BSRL faces notable risks, including intense competition in the retail sector, frequent shifts in consumer trends, and a heavy reliance on apparel, which constitutes approximately 84% of its revenue. Additionally, the company depends on a broad network of third-party suppliers without long-term agreements, posing potential operational risks. The company commands a high valuation with a P/E ratio of 124x at the upper price band based on FY24 earnings. However, given the company’s efforts to enhance its financial performance, increase profitability through private labels, and expand market penetration, we recommend a “SUBSCRIBE” rating for the issue, considering its growth prospects and strategic initiatives.
What is the Baazar Style Retail Ltd IPO?
Baazar Style Retail IPO is a book built issue of Rs 834.68 crores. The issue is a combination of fresh issue of 0.38 crore shares aggregating to Rs 148.00 crores and offer for sale of 1.77 crore shares aggregating to Rs 686.68 crores.
How to apply for the Baazar Style Retail Ltd IPO through Stoxbox?
To apply for the Baazar Style Retail Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Baazar Style Retail Ltd IPO open?
Baazar Style Retail Ltd IPO is opening on 30th August 2024
What is the lot size of the Baazar Style Retail Ltd IPO?
The Lot Size of Baazar Style Retail Ltd IPO is 38 equity shares
When is the Baazar Style Retail Ltd IPO allotment date?
The allotment Date for Baazar Style Retail Ltd IPO is 04th September 2024
When is the Baazar Style Retail Ltd IPO listing date?
The listing Date for Baazar Style Retail Ltd IPO is 06th September 2024
What is the minimum investment required for the Baazar Style Retail Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,782
What is the maximum investment allowed for the Baazar Style Retail Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 192,166
What are the risks associated with investing in the Baazar Style Retail Ltd IPO?
- Intense competition challenges retail performance: The fashion and retail industry is fiercely competitive, with rapid shifts in consumer trends and technology impacting market share. Facing competition from large, well-resourced players, diverse retail formats, and rising online competitors, the company must continuously innovate and adapt to maintain its market position and financial health.
- High dependence on apparel segment faces risk: The company depends significantly on selling apparel, which makes up 83.8% of its revenue. This reliance means any sudden changes in fashion trends or customer preferences could negatively affect its business if it fails to adapt quickly.
- Dependence on third-party suppliers poses risks: The company relies on a diverse network of third-party suppliers without exclusive agreements, which could impact its operations if suppliers fail to deliver quality products or face disruptions. With no long-term contracts, the firm must continuously manage supplier relationships and adapt to potential supply chain issues, affecting inventory and overall business stability.
When will the Baazar Style Retail Ltd IPO shares be credited to my Demat account?
The Baazar Style Retail Ltd IPO be credited to the account on allotment date which is 05th September 2024
Where can I find the Baazar Style Retail Ltd IPO prospectus?
The prospectus of Baazar Style Retail Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Baazar Style Retail Ltd IPO?
| IPO Open Date | Friday, August 30, 2024 |
|---|---|
| IPO Close Date | Tuesday, September 3, 2024 |
| Basis of Allotment | Wednesday, September 4, 2024 |
| Initiation of Refunds | Thursday, September 5, 2024 |
| Credit of Shares to Demat | Thursday, September 5, 2024 |
| Listing Date | Friday, September 6, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 3, 2024 |
