Baazar Style Retail Limited has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to initiate an initial public offering (IPO).
The Kolkata-based value fashion retailer’s IPO, backed by investors such as Rekha Jhunjhunwala, Kewal Kiran Clothing Limited, Manohar Lal Agarwal, the promoter of Haldiram Snacks, and others, comprises a fresh issue worth up to Rs 185 crore and an offer for sale of up to 16.88 million shares by the promoter group and other selling shareholders.
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Among the selling shareholders are Rekha Jhunjhunwala, Intensive Softshare Private Limited, Intensive Finance Private Limited, Chandurkar Investments Private Limited, Subroto Trading & Finance Company Limited, Rajnish Gupta, Madhu Surana, Sabita Agarwal, Rekha Kedia, Shakuntala Devi, and D.K Surana HUF. Additionally, eligible employees have a reservation for subscription.
The company, along with its book-running lead managers, is contemplating an additional issuance of specific securities via avenues like private placement, rights issue, preferential offer, or any alternative method, totaling up to Rs 37 crore as a “pre-IPO placement.” Should this placement be finalised, it will result in a reduction in the size of the fresh issue.
The offer will follow the book-building process, ensuring that at least 75 per cent of the net offer is allocated proportionately to qualified institutional buyers. Non-institutional investors will have access to no more than 15 per cent of the net offer, while retail individual investors will have a maximum allocation of 10 per cent of the net offer, ensuring fair distribution across investor categories.
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The funds generated from the fresh issuance, amounting to Rs 135 crore, will be allocated towards either prepaying or repaying all or a portion of specific outstanding borrowings acquired by the company, as well as for general corporate purposes.
Baazar Style Retail, established in FY14, has emerged as a key player in the value retail segment, not only in West Bengal and Odisha but also in core markets like Assam, Bihar, Jharkhand, Andhra Pradesh, Tripura, Uttar Pradesh, and Chhattisgarh.
The company boasts notable growth metrics, as highlighted by Technopack’s report cited in the DRHP. It outpaced competitors like V2 Retail and V Mart Retail in terms of store count and revenue from operations during the period from 2017 to 2023.
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Its product offerings span a wide spectrum, encompassing apparel and general merchandise such as cosmetics, imitation jewelry, consumer appliances, houseware products, and bags. The apparel segment covers a diverse range, catering to the fashion needs of men, women, children, and youngsters, including both private label and third-party brands.
One of the distinguishing features of Baazar Style Retail is its family-centric brand, Style Bazaar, which witnessed remarkable growth from 2 stores in 2014 to 135 stores by FY23, achieving a commendable CAGR of 59.68 per cent. By December 31, 2023, the company had expanded its footprint to 153 stores spread across 140 cities, occupying approximately 1.39 million square feet.
The company’s financial performance showcases a noteworthy turnaround, with a standalone profit of Rs 5.10 crore in FY2023, compared to a net loss of Rs 8.01 crore in the preceding year. Standalone revenue from operations surged significantly to Rs 787.90 crore in FY2023 from Rs 551.12 crore in the previous year, attributed to the expansion of the retail network and robust same-store sales growth post the economic revival following the Covid-19 pandemic.
Baazar Style Retail’s IPO is being managed by Axis Capital Limited, Intensive Fiscal Services Private Limited, and JM Financial Limited, with Link Intime India Private Limited serving as the registrar of the issue.
