Baazar Style Retail IPO Lists at ₹389, Flat with Issue Price

Baazar Style Retail, a leading value fashion retailer in Eastern India, made a flat debut on the Indian stock market on 6th September 2024, with its shares listing at par with the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, but the listing failed to meet market expectations.

• Listing Price: Baazar Style Retail shares were listed at ₹389 per share on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), matching the upper end of its IPO price band.
• Comparison to Issue Price: The listing price represents no premium over the IPO issue price. Baazar Style Retail had set its IPO price band from ₹370 to ₹389 per share.
• Percentage Change: The listing price of ₹389 on both exchanges translates to a 0% premium over the issue price of ₹389.

First-Day Trading Performance

• Opening vs. Latest Price: Baazar Style Retail's share price gained momentum following its flat opening. By 10:48 AM, the stock was trading 7.3% higher at ₹417.5 apiece on the NSE.
• Market Capitalisation: At 10:48 AM, the company's market capitalisation stood at ₹3,115.2 crore.
• Trading Volume: On the NSE, 38.72 lakh shares changed hands, amounting to a turnover of ₹150.85 crore.

Market Sentiment and Analysis

• Market Reaction: Despite the flat listing, the market reacted positively to Baazar Style Retail during early trading. The post-listing gains indicate some investor confidence in the company's prospects.
• Grey Market Premium: Before listing, shares were trading at a premium of ₹33 in the grey market, suggesting expectations of a 10% listing pop that did not materialise.
• Analyst Expectations: Some analysts had expected a listing premium of up to 15%, citing the company's growth potential and profitability enhancements.

Growth Drivers and Challenges

• Expected drivers of future performance:
• Among the fastest-growing value retailers between 2017 and 2024
• Strong expansion with store count growing from 2 in FY14 to 162 in FY24
• Strong control over supply chain and targeted marketing
• Potential challenges: Geographic concentration in Eastern India, Highly competitive industry and High employee attrition rate of 36% as of FY24

Utilisation of IPO Proceeds

• Baazar Style Retail plans to use the funds for:
• Debt repayment (₹146 crore from fresh issue)
• General corporate purposes

Financial Performance

• The company has demonstrated strong financial growth:
• Revenue increased from ₹551 crore in FY22 to ₹972 crore in FY24
• Net Profit improved from a loss of ₹8 crore in FY22 to a profit of ₹21.9 crore in FY24
• EBITDA grew from ₹68 crore in FY22 to ₹142 crore in FY24
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As Baazar Style Retail begins its journey as a listed entity, market participants will closely monitor its ability to leverage its strong position in Eastern India's value retail market to drive future growth and shareholder value. The initial post-listing gains suggest that investors may look beyond the flat debut to focus on the company's long-term prospects.