India’s ₹6,592.11 billion lifestyle and home value sector plays a crucial role in shaping the purchasing habits of millions, accounting for 54% of the broader retail industry. The immense size of this market demonstrates its growing importance in the economy.
Amidst this Baazar Style Retail has carved out a strong foothold, catering to a diverse audience seeking stylish, affordable options. Its steady expansion, especially across Eastern regions, shows its commitment to delivering value to a widening customer base.
Looking for more details on Baazar Style Retail’s IPO and growth prospects? Dive deeper into the blog for comprehensive insights.
Also read: The Indian fashion industry: A booming sector with huge potential
About Baazar Style Retail
Baazar Style Retail has become a significant force in the organised fashion sector of Eastern India, establishing a strong foothold in states like West Bengal and Odisha. Its market share in these regions stands at 3.03% and 2.22%, respectively, highlighting its influence in the value-driven segment of the retail landscape.
Founded in June 2013 as Dwarkadas Mohanlal Private Limited, it wasn’t long before the company rebranded to its current identity, Baazar Style Retail. By 2022, the business transitioned to a publicly limited company. As of August 2024, it manages 162 outlets in 146 cities, covering over 1.47 million square feet of commercial space.
Baazar Style’s primary target audience is the rising middle-class demographic, a group that seeks affordable yet stylish products. From apparel to household goods, the brand offers an extensive product range under its well-known label, ‘Style Bazaar’.
Adopting a strategic approach to scaling its operations, the brand follows a cluster-based model, concentrating on expanding in regions where it has already established a presence. This method helps solidify its position in existing markets while boosting brand visibility and driving efficient management of resources.
The business is backed by prominent investors, including Rekha Rakesh Jhunjhunwala and other key figures in Indian industry. The leadership team, led by experienced figures like Pradeep Kumar Agarwal and Rohit Kedia, continues to steer the brand with a clear focus on efficiency and sustainable growth.
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Financial performance
Baazar Style Retail has undergone a significant transformation in its financial results, transitioning from losses to profitability. In FY23, the business reported a profit of ₹5.10 crore, a notable shift from the previous year’s net loss of ₹8.01 crore.
The trend is also evident in the company’s earnings. For the year ending in March 2023, the firm recorded ₹787.90 crore in earnings, up from ₹551.12 crore in the previous period.
As the company progressed into FY24, its upward trajectory continued. Earnings rose to ₹973 crore, reflecting a strong compound annual growth rate of 32.86% between FY22 and FY24. This outpaces the broader lifestyle and home value retail sector, which grew at 19.3% during the same period, signalling Baazar Style Retail’s aggressive market approach and strategic foresight.
Their product range includes both branded and private label items. The latter contributed 38% to the company’s earnings in FY24. With greater control over product design and pricing, these in-house brands have allowed the business to maintain quality while offering competitive pricing. In fact, the company’s merchandise sales have more than doubled over the past few years, growing from 17.58 million units in FY22 to 33.69 million units by FY24.
| Particulars (₹ crore) | FY24 | FY23 | FY22 |
| Revenue from operations | 972.882 | 787.903 | 551.118 |
| Total income | 982.826 | 794.389 | 5611.39 |
| Profit/ (loss) before tax | 29.219 | 5.407 | -10.049 |
| Profit/(loss) after tax | 21.942 | 5.102 | -8 |
Source: Baazar Style Retail RHP
Baazar Style Retail IPO
Baazar Style Retail is entering the market with its public offering, aiming to generate ₹835 crore. The company is offering a blend of new equity and a share sale from existing stakeholders.
The company is bringing in ₹148 crore through newly issued equity, while ₹686.68 crore worth of shares will be sold by existing shareholders, including the promoter group. The pricing is set within a band of ₹370 to ₹389 per share. Investors can place bids in lots of 38 shares. Additionally, each equity unit is discounted by ₹35 for employees.
Notably, the logo secured ₹37 crore from Volrado Ventures Partners Fund II in a pre-IPO deal earlier this month. This prior funding led to a reduction in the total new share issuance, allowing the company to adjust its fundraising target accordingly.
| Face value | ₹5 per share |
| Price band | ₹370-₹389 per share |
| Lot size | 38 shares |
| Total issue size | ₹834.68 crore |
| Fresh issue | ₹148 crore |
| Offer for sale | ₹687 crore |
| Employee discount | ₹35 per share |
| Listing at | BSE, NSE |
Allocation strategy
The IPO has been divided into different investor categories, ensuring a balanced distribution:
- Qualified Institutional Buyers: 50%
- Non-Institutional Investors: 15%
- Retail Individual Investors: 35%
Key facilitators
Axis Capital, Intensive Fiscal Services, and JM Financial overseeing the issue. Link Intime India is handling the administrative side as the designated registrar.
Timeline to watch
The anchor investor portion is slated for 29th August 2024, while public bidding will be open from 30th August through 3rd September.
The allocation process for Baazar Style Retail’s public offering is expected to conclude on Wednesday, 4th September (Basis of allotment). Refunds for unsuccessful bidders will be initiated on Thursday, 5th September, and those allocated will have their securities transferred to their demat accounts on the same date. The company’s stock is scheduled to debut on the bourses on Friday, 6th September.
Objective
A large portion of the capital raised will go toward cutting down existing borrowings. With ₹146 crores dedicated to paying off debt, Baazar Style Retail plans to streamline its financial obligations, improving its overall stability and allowing for better cash flow management in the future.
Another share of the funds will be allocated towards general business activities. This flexible pool is not tied to any single project, giving the organisation the ability to respond to various operational demands. It ensures that the company remains adaptable, whether it needs to invest in growth opportunities or manage day-to-day challenges.
Shareholder structure (pre-offer)
| Category | No. of equity shares | % of paid-up equity |
| Promoters | 23,762,760 | 33.56% |
| Promoter group | 15,203,080 | 21.47% |
| Selling shareholders | 21,749,882 | 30.72% |
At the moment, the shares are trading at a ₹131 premium over the top end of the offer price. The breakdown below gives a snapshot of the current figures:
| Details | Value |
| Upper price band | ₹389 |
| Current grey market mark-up | ₹131 |
| Projected opening value | ₹520 |
| Potential gain | 33.68% |
This additional value reflects strong sentiment ahead of the formal listing. An anticipated opening value of ₹520 signals positive momentum, suggesting potential upside for investors. However, it’s crucial to note that grey market trends can shift, and actual market performance may vary.
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Bottomline
Baazar Style Retail’s IPO presents an opportunity for investors seeking exposure to a growing value retail segment. While the company has shown promising financial performance and market expansion, potential investors should consider both the positive grey market signals and the inherent risks associated with the retail industry. Always evaluate the broader market conditions before making a decision.
