According to media reports, Sequoia Capital offloaded 5.48 million shares of Go Fashion at a floor price of ₹1,135 per share, which marked a discount of 5% as compared to the last closing price of ₹1,194. The total size of the block deal was ₹624 crore.
With this, Sequoia Capital, which had earlier sold a 3.7% stake in Go Fashion during its initial public offering (IPO) in November 2023, has exited the company completely.
Go Fashion made a stellar debut on the stock exchanges on November 26, 2023, listing at a premium of 84% over its issue price of ₹690. The stock had touched a 52-week high of ₹1,453 on December 6, 2023, but has since corrected sharply due to profit-booking and market volatility.
Go Fashion is one of the leading women’s bottom wear brands in India, offering a wide range of products such as leggings, jeggings, palazzos, denim, and ethnic wear. The company has a strong distribution network of over 450 exclusive brand outlets and more than 4,000 multi-brand outlets across the country.
The company reported a robust financial performance for the quarter ended March 31, 2023, with a revenue growth of 36% year-on-year to ₹1.58 billion and a net profit growth of 20% year-on-year to ₹147.76 million. The company also improved its EBITDA margin by 95 basis points year-on-year to 29.6%.
Despite the recent correction, Go Fashion still trades at a premium valuation of 79 times its trailing twelve months' earnings per share and 12.6 times its book value per share. The company faces competition from other established and emerging players in the women’s apparel segment, such as W for Women, Biba, Global Desi, and Fabindia.
However, Go Fashion also enjoys several competitive advantages such as strong brand recall, loyal customer base, product innovation and quality, efficient supply chain and inventory management, and favorable industry trends.
The Indian women’s apparel market is expected to grow at a compound annual growth rate (CAGR) of 10% over FY20-FY25 to reach ₹2.8 trillion, driven by increasing disposable income, urbanization, working women population, and online penetration.
Go Fashion aims to leverage this opportunity by expanding its product portfolio, increasing its geographical presence, enhancing its online presence, and exploring new growth avenues such as men’s wear and kids’ wear.
In conclusion, Go Fashion is a leading player in the Indian women’s bottom wear market, with a strong brand, product portfolio, and distribution network. The company has delivered a solid financial performance in the last quarter and has a positive outlook for the future. However, the stock has witnessed a sharp fall in the recent past due to Sequoia Capital’s exit and market volatility. The stock still trades at a high valuation and faces competition from other players in the segment. Therefore, investors should be cautious and do their own research before investing in Go Fashion.