Baazar Style Retail shares likely to list at 15% premium over IPO price on September 6

IPO of Baazar Style Retail garnered 40.63 times subscription on the closing day.

Baazar Style Retail shares are likely to be listed at a 10-15 percent premium on the bourses on Friday, experts believe. The initial public offer of Rekha Jhunjhunwala-backed value fashion retailer garnered 40.63 times subscription on the closing day of bidding.

The Rs 835-crore initial share sale had a price band for the offer is Rs 370-389 per share.

Akriti Mehrotra, Research Analyst at Stoxbox said the stock is poised for a decent market debut and expected to list at a 15 percent premium.

The IPO was a combination of a fresh issue of equity shares worth Rs 148 crore and an offer for sale (OFS) of up to 1.76 crore shares valued at Rs 687 crore (at the upper end of the price band) by promoter group entities and other selling shareholders.

Baazar style retail is one of the leading players in the value retail market in West Bengal and Odisha. Additionally, its other core and focus markets include Assam, Bihar, Jharkhand, Andhra Pradesh, Tripura, Uttar Pradesh and Chhattisgarh.

Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers noted the company is well focused on catering to the needs of aspirational Indians with affordable pricing only in Tier II and Tier III cities.

"We believe that the company may list above issue price based on the subscription data and market sentiments," he added.

Prashanth Tapse, Sr VP Research – Research Analyst at Mehta Equities Ltd said despite the expensive valuation and higher OFS offer, Baazar Style Retail received a decent 40x subscription demand considering the market optimism and ongoing IPO demand & listing performances.

"Considering markets' muted mood and decent subscription demand, we expect a decent listing gain around 10-15% against the issue price of Rs 389 per share in the best-case scenario," Tapse stated.

Proceeds from the fresh issue, to the extent of Rs 146 crore will be used for payment of debt and the remaining funds will be used for general corporate purposes.

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