Go Fashion India Ltd, which owns Go Colors, has filed draft papers with the securities regulator for an initial public offering (IPO) in which venture firm Sequoia Capital and others will sell shares.
The IPO consists of a fresh issue worth Rs 125 crore and an offer for sale (OFS) of up to 12.88 million shares by shareholders and promoters. The OFS includes up to 7.46 lakh shares each of PKS Family Trust and VKS Family Trust; 7.50 million shares of Sequoia Capital; up to 3.31 million shares of India Advantage Fund S4 I; and up to 5.77 lakh shares of Dynamic India Fund S4 US I.
The stakes of PKS Family and VKS Family Trust stand at 28.74% each. Sequoia Capital holds 28.73% stake, India Advantage Fund S4 I 12.69% and Dynamic India Fund S4 US I 1.1% stake.
JM Financial, DAM Capital Advisors and ICICI Securities are the lead managers for the issue.
Go Colors proposes to utilise Rs 33.7 crore from proceeds towards funding the rollout of 120 new exclusive brand outlets in India. As of May 2021, the company had 450 such outlets located across 115 cities.
It also proposes to utilise Rs 61.4 crore to fund working capital requirements. As of June 2021, its total sanctioned limit of working capital facilities stood at Rs 65 crore.
Founded in 2010 by Vinod Saraogi and Prakash Saraogi, Go Colors is one of the largest women’s bottom-wear brands in India, with a market share of approximately 8%. It is engaged in the development, design, sourcing, marketing, and retailing.
Go Colors' distribution channels include large format stores including Reliance Retail Ltd, Central, Unlimited, Globus Stores Pvt Ltd and Spencer's Retail. As of May 2021, the large format store count has grown to 1,332 from 925 in 2018-19.
For 2020-21, revenue from operations was Rs 250.7 crore versus Rs 392 crore a year ago. Net loss for the period stood at Rs 3.5 crore against a profit of Rs 52.6 crore a year ago.
The firm says that lockdowns imposed initially impacted revenues. However, the demand for its products from online channels continued to remain strong. The sale of products has increased 17.26% to 2.56 million units in 2020-21 from 2.18 million units a year ago.