Go Fashion, which sells women’s bottom-wear under the GoColors brand name, is planning its public offering next week on November 17. The company is planning to raise Rs 1,013 crore through IPO.
The company is targeting to bring Rs 5,000 crore revenue by 2021 from the overall Rs 3,900 crore revenue in 2018. The company aims to more than double its revenue by 2021. It plans to reach about Rs 35,000 crore by 2021, which is almost twice its revenue of Rs 13,900 crore in 2018.
In the first half of 2018, the company reported a net profit of Rs 41 crore as compared to a net loss of Rs 12 crore in the same period in 2017.
Go Colors, which is one of the largest among the company’s brands, is among the top ten women’s innerwear brands in the country. Other brands that contribute to the company’s revenue are Go Chain, D-Trends, Red Peony, and my doll.
Selling Women’s Bottom-Wear
Go Fashion has a presence in 18 states in India and also supplies to entire southeast Asia. The company caters to 35% of the total women’s apparel market in India. As of March 2017, the company operated 856 EBOs in 47 cities across the country. The company has an annual revenue of Rs 1,648 crore.
“It is almost 6 months since the company first started floating the idea. We have done everything, right from evaluating the business model to forming the new top management to creating a new set of the executive team,”
A top company official said on the sidelines of an event in Mumbai.
Go Fashion is backed by PE investors which include Helion Venture Partners, Singapore sovereign wealth fund GIC Holdings, Hong Kong’s PCCW Ltd.
Raising Rs 1,013 Crore
The company said in a release that its board of directors had declared an initial public offering (IPO) of equity shares of its own volition and authorized the board to fix the price band for the IPO and is expected to sell a total of 16,200,000 equity shares of the face value of Rs 10 each, of which 11,000,000 equity shares are to be issued in the public offering.
“The company expects to raise around Rs 1,013 crore from the IPO of which promoters will dilute their stake by 17.6 percent. The company would not receive any proceeds from the IPO,” it added.
The company plans to file a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) by November 21.
Launching 2000 Exclusive Brand Outlet (EBO)
“We will have a reasonable expansion plan in all our major markets of Bengaluru, Delhi, Hyderabad, Mumbai, Pune, and Ahmedabad. We have also plan to expand to all key cities where we operate in. We have plans for additional 2000 EBOs across all our key cities.
The stores will be most of them exclusive brand outlets,” said Laxmi Nadar, Managing Director, Go Fashion, adding that these stores will be opened in the next six to seven years.
The company currently has 22 EBO stores in Bengaluru, while, Delhi-NCR and Chennai have 18 each, Pune and Ahmedabad have 10 each, and Kolkata and Kolkata have six each. Go Fashion currently sells around 13,000 products and it plans to add another 3,000 products in its range.
Laxmi Nadar, Managing Director, Go Fashion, talks about the IPO.
Contributed 69% of Revenue in Financial Year 2021
Notably, Go Fashion is the newest addition to the list of the companies planning to go public. The company expects to raise about Rs 1,013 crore from its public offering, said Sashi Kumar, Chairman, and Managing Director of Go Fashion, in a statement.
Go Fashion expects to list on the BSE and NSE next week, which is slated for November 17. Its total revenue is expected to be Rs 1,142 crore in the financial year 2021.
No information is available on how many shares are planned to be sold at each of its public offering prices of Rs 299.
The brand name Go Colors
“Go Fashion aims to go public by the end of next week,” a company official told PTI. The company has got the approval of its board to float an IPO through which the company would offer its shares to institutional investors.
“The company will raise about Rs 1,013 crore through the issue of shares to its anchor investors,” the official said.
The company had reported a revenue of Rs 1,727 crore for the financial year ended March 31, 2017. For the year ended March 31, 2017, the company had a profit of Rs 117.56 crore on a revenue of Rs 1,727.91 crore.
Go Fashion had Rs 95 crore net profit in 2016-17, compared to a profit of Rs 44.52 crore in the previous financial year. The company’s shares are proposed to be listed on BSE and NSE, the official added.
The company currently operates about 459 Exclusive Brand Outlets (EBO) in the country
The company operates EBOs across Delhi NCR, Bengaluru, Kochi, Kolkata, Lucknow, and Dehradun in the south, Bengaluru, Mumbai, Pune, and Chennai in the west, and Hyderabad and Bhubaneshwar in the east.
Go Fashion sells innerwear, as well as casual wear and men’s wear under the brands, Go Colors and Go Passport. The company reported a revenue of Rs 1,716.2 crore in FY2017, a 5.5 percent growth over the previous fiscal. The company added 914,200 square feet in the last year, adding around six percent to its store space, translating to 459 EBOs.
The company’s EBOs primarily target small towns and rural markets, with a major chunk of sales generated in Western UP and Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, and Chhattisgarh.
To adopt an omnichannel approach
To accelerate the growth of its revenue, the company is looking at the adoption of an omnichannel approach. Go Fashion aims to be present across all major online as well as offline channels. Go Fashion has also launched its e-commerce website ‘gofashion.com’ to cater the brand to the growing e-commerce market.
“Today, based on our existing distribution, the company covers about 10,000 towns and cities and plans to add another 5000 towns in next five years. We are targeting about 35% revenue market share in the Indian market,” said, Harsha Shrivastava, executive director and CEO of
The company currently has 50-55% EBO stores in metro and larger cities, with a penetration of 20-30% in tier 1 and tier 2 cities.
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