Baazar Style Retail Files for IPO to Raise Funds and Fuel Growth

18 Mar 2024 , 02:31 PM

Baazar Style Retail, backed by Rekha Rakesh Jhunjhunwala, has taken a significant step forward by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to initiate fundraising from the public.

This initial public offering (IPO) will consist of a combination of fresh shares amounting to ₹185 Crore and an offer-for-sale (OFS) of up to 1.68 Crore shares by the promoter group and other selling shareholders.

The OFS will include the sale of shares by various entities, including Rekha Rakesh Jhunjhunwala, Intensive Softshare, Intensive Finance, Chandurkar Investments, Subroto Trading & Finance Company, Rajnish Gupta, Madhu Surana, Sabita Agarwal, Rekha Kedia, Shakuntala Devi, and D.K Surana HUF. Notably, upon the demise of Rakesh Jhunjhunwala, his equity shares were transmitted to Rekha Rakesh Jhunjhunwala, his nominee and wife.

Promoters of the company include Pradeep Kumar Agarwal, Rohit Kedia, Shreyans Surana, Bhagwan Prasad, Rajendra Kumar Gupta, Rajendra Kumar Gupta (HUF), and Sri Narsingh Infrastructure.

The company may also explore the option of further issuing specified securities through a pre-IPO placement, which could aggregate to ₹37 Crore. If such placement occurs, the size of the fresh issue will be adjusted accordingly.

The net proceeds from the fresh issue, estimated at ₹135 Crore, will be allocated towards prepayment or repayment of certain outstanding borrowings and general corporate purposes. Axis Capital, Intensive Fiscal Services, and JM Financial have been appointed as the book-running lead managers, while Link Intime India will serve as the registrar of the issue.

In terms of financial performance, Baazar Style Retail reported a standalone profit of ₹5.1 Crore in the financial year 2023, a significant improvement from the net loss of ₹8.01 Crore in the previous year. This growth can be attributed to a 43% increase in revenue from operations, which reached ₹787.90 Crore in fiscal year 2023, primarily driven by enhanced sales of apparel and non-apparel items, along with the expansion of the retail store network. As of December 31, 2023, the company boasted 153 stores across 140 cities.

With a strong presence in the value retail market, particularly in West Bengal and Odisha, Baazar Style Retail aims to further consolidate its position in core markets such as Assam, Bihar, Jharkhand, Andhra Pradesh, Tripura, Uttar Pradesh, and Chhattisgarh.