In this month, some very well-known companies came with their IPO. As usual, huge people applied in this IPO`s. Those who get the allotment get huge profit too. Today we are going to discuss one more IPO coming in this month which is of Go Colors.
At first we will talk about the company profile of Go colors. Go Colors is an renowned female bottom wear making company which has 8 percent branded market share. They usually do manufacturing, designing, sourcing, marketing and retailing of those female bottom wears.
Business Model
It came in spotlight as it just focuses one business which was untapped mostly i.e. women bottom wear. It has 459 exclusive brand outlets in mega cities in all over the country. If we talk about the distribution channel, they follow LFS which is large format store. It means most of their products found in Max, spencer, central showrooms. They have some online presence too.
Strengths
Now let`s understand how this company generate profit and what are their strengths in general. The first strength of the company is that it has a diverse range of their products in their niche. The second strength of the company is that it has a good brand visibility and distribution network.
Risks
It has some risks also. In 2021, where 42 new outlets were opened, same year 41 outlets get closed. The reasons are none other than pandemic. There outlets also remain closed so that no revenue was generated in the pandemic time. This can be found in their financials too. More than 36 percent revenue declined happened in the lockdown period. They have also gone through cut off their workers in huge number which is also not a good sign for any company.
Online Business
Even the online business was also not that much profitable as they depend fully on the courier services of other companies. So you can understand that this type of company is vulnerable for any changes in the society like pandemic or any kind of disaster.
One of the risks is that in last year they are not even profitable, every financial statement of the company declines. They are also increasing their debt year after another. But if we compare with the company with its peer we will get that this company generated more CAGR than any other company in the same business.
IPO data
Now let`s discuss the important data of this IPO. This company issued fresh issue as well as offer for sale shares. They have shown three reasons for the IPO. First is to funding roll out of 120 new outlets across the country. Second is to funding working capitals. Third is to generate corporate purposes.
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IPO dates
Now we will discuss important dates of the IPO. This issue size of the IPO is 1013 crore rupees. The price band ranges from 655-690 rupees for this IPO. The issue will open on 17th December and it will be listed in stock market on 2021. At present, the GMP of the IPO is 550 rupees which is quite high so you can expect good listing gain from this company.