Go Fashion IPO: Last day of subscription, what to invest and find out what’s going on GMP

Go Fashion IPO GMP:Today is the last day for the IPO of women’s clothing maker Go Fashion. The issue of the company has been subscribed 6.87 times in the last two days. The company had launched an issue worth Rs 1013.61 crore. The issue price is Rs.655-690. While its unlisted shares in the grey market are trading at a premium of Rs 470.

According to market experts, the grey market premium (GMP) for Go Fashion IPO is Rs 470 on Monday, down By Rs 30 from a day earlier. Market experts say the company’s fall in GMP is predictable. For the past one week, Go Fashion IPO’s GMP had been spinning close to Rs 500. Market experts say the strength of grey market premiums is showing strong sentiment from investors. It is expected to affect subscriptions as well.

According to the existing GMP, the listing of shares of Go Fashion can be at Rs. 1160 (Rs. 690+470). This is 70% higher than the upper price band of the company.

Is it okay to invest?

According to Angel Broking, the company has an EV/EBITDA-30.2X for FY 2020 after the issue was issued in terms of valuation. It is the same as the company’s rival company TCNS Clothing. the track record of revenue growth of Go Fashion is quite good. Higher operating margins and high return on equity (RoE) are similar to TCN Clothing.

According to Angel Broking, the valuation of the company is at a reasonable level and based on this the brokerage firm has advised investment in its IPO. However, market experts have warned investors that investment should not be made based only on grey market premiums. It is important to understand the financial health of the company before investing.

Go Fashion IPO GMP
Go-Fashion-IPO-GMP

According to Mint, Avinash Gorakshakar, research head at Profitmart Securities, said, “Grey market premium listing gains are not guaranteed. So, everybody should look at the financial position of the company. “There is only a fresh issue of Rs. 125 crore in the IPO of Rs. 1013.61 crore. At the same time, the valuation of the issue is also high. The issue is likely to pick up some what is expected due to recent discussions in the textile sector. Therefore, bidders are advised to look very closely at the balance sheet of the company rather than depending on GMP. “

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