Go Colors IPO GMP, Allotment, good or bad? detailed review

Go Fashion India limited (Go Colors)IPO Introduction
What are the risk factors in Go Colors IPO?
What are the product offerings of Go fashion India limited (Go Colors)?
What are the competitive strengths of Go Fashion India Limited IPO?
How are the financials of Go colors (Go Fashion India Limited) IPO?
Objects of Go Colors (Go Fashion India Limited) IPO proceeds
Go Colors (Go Fashion India Limited) IPO open & close date
Go Colors (Go Fashion India Limited) IPO allotment, refund & listing date
Go Colors (Go Fashion India Limited) IPO allotment check
Go colors (Go Fashion India Limited) IPO price band
Go Colors (Go Fashion India Limited) IPO GMP today
Is Go colors IPO overpriced?
Is Go Colors IPO good or bad (review)?
FAQ

Go Fashion India limited (Go Colors)IPO Introduction

They are a women’s bottom-wear brand in India, with a market share of approximately 8% in the branded women’s bottom-wear market in Fiscal 2021. The Chennai-based company aims to raise Rs. 1013 crores through its public offer which includes fresh issue of equity shares aggregating up to Rs. 125 cores and offer for sale of 1.28 crore equity shares from the selling shareholders.

What are the risk factors in Go Colors IPO?

1. The company reported a loss for FY-21 and the Qtr ending June 2020 and 2021

2. Company has a single warehouse located in Southern India, any socio-economic or political disruptions in that area may lead to adverse effects on the company

3. Company has yet not decided where to use the net proceeds of the IPO

4. The IPO proceeds from the offer for sale will not be used by the company instead funds will go into the hands of the shareholders

5. There are outstanding legal proceedings against the company of Rs 1.74 Cr

6. The company was heavily affected by the Covid-19 pandemic and may act in the future too

What are the product offerings of Go fashion India limited (Go Colors)?

Their product portfolio includes churidars, leggings, dhotis, harems, Patiala, palazzo, culottes, pants, trousers, and jeggings across multiple categories including ethnic wear, fusion wear, western wear, loungewear, athleisure, Go Plus, and girl’s wear. They are among the few women’s apparel retailers that offer bottom-wear products across all categories, including ethnic, western wear, fusion, and denim, and have one of the most extensive bottom-wear product offerings in women’s apparel

What are the competitive strengths of Go Fashion India Limited IPO?

1. They are one of the largest Women’s bottom-wear brands in India with a well-diversified product portfolio with the brand name Go colors

2. They have a multi-channel retail presence across India

3. They have shown continuous growth in profitability except in FY-21 where Covid-19 hit the business

4. The company is focusing on online revenue growth

How are the financials of Go colors (Go Fashion India Limited) IPO?

Companies revenue and profit for FY-19 & FY-20 are impressive
Companies revenue and profit for FY-21 and Qtr June 2020 and 2021 are declining and making losses

Financial Year Ended	Revenue (₹ Crores)	PAT (₹ Crores)	EPS (₹)
March 2019	290.98	30.94	5.93
March 2020	396.84	52.63	10.08
March 2021	282.25	-3.54	-0.68
Three months ended June 2020	20.74	-8.60	-1.65
Three months ended June 2021	40.29	-19.00	-3.64

Go Fashion India Limited(Go Colors) Financials

Objects of Go Colors (Go Fashion India Limited) IPO proceeds

The company will not receive any proceeds from the Offer for Sale and the proceeds received from the Offer for Sale will not form part of the Net Proceeds.

The Company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:

Funding roll out of 120 new EBOs;
Funding working capital requirements; and
General corporate purposes.

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Go Colors (Go Fashion India Limited) IPO open & close date

17th November 2021 to 22nd November 2021

Go Colors (Go Fashion India Limited) IPO allotment, refund & listing date

Allotment date: 25th November, Refund date: 26th November, Listing date: 30th November

Go Colors (Go Fashion India Limited) IPO allotment check

Go colors IPO allotment can be checked through the registrar website kfintech.com

Go colors (Go Fashion India Limited) IPO price band

Price range	655 – 690
Minimum order quantity	21

Go Colors (Go Fashion India Limited) IPO GMP today

Go colors IPO GMP is Rs 435 as of 25th November 2021(63.04% premium)

Is Go colors IPO overpriced?

Calculating with its upper price band of Rs 690

Now, the EPS (earning per share) for the FY21 is negative

But When we take the last three years average weighted EPS which is 4.01

690/4.01 = 172x P.E ratio, Page Industries is the only listed peer according to DHRP and if we compare the P.E ratio of Page Industries which is 130X, Hence we can say that in comparison It is overpriced.

Is Go Colors IPO good or bad (review)?

Go Colors is one of the largest brands in women’s bottom wear and also has a pan India retail capture, but from last year FY-21 the company is at a loss and highly affected by the Covid-19 pandemic. However, the company has shown good revenue and profitability before FY-21 So, from an investment perspective it will be good to wait till it reaches profitability. But for only listing gains it will be a good call as all recent IPO’s despite bad financials are showing bumper listings and this will also be the same.