Is it good to hold or sell Go fashion share after IPO listing

 What Investors should do in Go fashion stock after its IPO listing?

Indian stock market investors are getting very bumper returns from last few months. In the IPO market, a lot of profit has been made for the investors and traders. Today we will understand that stocks of "Go colors" should hold or sell after IPO listing? Let us first discuss some of the positives and negatives of Go Fashions Company.

Question:

What are the Positive Points of "Go Fashion" Company?

Answer:

1) The track record of the fashion company is very high, whether we talk about the company's profit; we can talk about the company's revenue or the outlook of the company's management regarding the opening of new stores. We can say that the management of the company is focused on the business.

2) Go fashion company based on assist league model

It can also be understood in the simple language of the asset light model that if the company wants to open any store, then it does not construct its own property to buy, the company rents the stores. The advantage of the asset light model is that the company is opening more stores in different cities, where the stores have to be rented and for this huge investment is not required. At the current time Go fashions Company has nearly 459 exclusive brand outlets located across 118 cities & 23 states.

3) The famous brand of Go Fashions Company is "Go Colours". With the same name, the company's stores are open in Indian and if you understand the views of the people, then matching dresses of every colors are available at the "Go Colors" store in the women's collections. One thing is clear from this that the company does not have any shortage of customers.

 4) Go fashion company is debit free company. If we will analysis the company balance sheet then we will find that there is more cash is available with company. In FY21, company had reported more than 68% revenues from new brand outlet’s segment. Overall revenues is nearly 4% from other business segments.

5) If we will talk about the company valuations then it looks not much expensive as well as not much under values. It means company is coming up with IPO price band of 655 to 690rs looks at fairly priced. We can say that something is left on table for the Shareholders even after IPO listing.

6) There is no legal case against the Go fashion company.  It is very good thing because if company has very good corporate governance then more Investors will attract toward the company and Future outlook will be good of the company.

7) Company management expecting good growth in net 5 years and in the FY25 or FY 26 , only women wear segment may generate business of above 24,000cr which was reports above 13,000cr in Fy20. It means company is expecting more than 40% growth in the coming few years which is good sign.

8) Go Colors IPO had received bids for nearly 109.4 crore stocks  as against the IPO offer of 80.8 lacs shares , non-institutional investors was subscribed 262.1 times & qualified institutional buyers QIBs, portion subscribed 100.7 times. In this IPO retail investor show good interest and subscribed 49.7 times. It also goes in the favour of “Go fashions” IPO listing. We may see good listing of “Go fashions” IPO. The company is looking to use IPO raised funds for opening of 120 additional exclusive brand outlets & to meet working capital requirements and for general corporate purposes. Currently, Go Fashion India has a market share of about eight percent.

Question:

What are the negative Points of Go Fashion Company?

Answer:

1) Go fashion company is operating its business into the very competitive market. There are many other brands into the same business segment which are giving competition to the company. Therefore, In the Garment sector, any new competitor may come into the market and start its own garment business and at local level may give good competition to the company.

2) Go fashion is a small size company and company had faced bad time in 2020 due to covid 19. Before Covid Company has sales figures was approximately 285cr but during covid time sales of the company dropped to nearly 250cr which was expected and almost happened with all companies. We can say Company is doing nearly 400cr sales on an average.

3) The biggest negative point with “Go fashions” Company which we feel that Company has not much online sales business, If we will calculate then only 4% to 5% Business Company is generating from online sales. These days other companies are earning good sales from online business. On this matter company management should look into.

4) Company had posted  nearly Rs 3.5 crore  of loss in the financial year ended March 2021 but in FY20 company was in profit nearly Rs 52.6 crore. As per the company management this was only due to , impact of  Covid 19 &  lockdowns. Revenue in FY21 also declined to Rs 250.66 crore from Rs 392.01 crore in FY20.

Question:

Go fashion Stock hold or sell?

Answer:

If we will read above Positive and negative points of the company then Positive points over weigh negative point’s thereforeif any investors have long term investment point of view then you may buy “Go fashions” Stock after IPO listing. If we will not be very optimistic for “Go fashion” IPO listing premium then we should expect Go fashion IPO listing above 900rs per share or we may see more premiums in “Go fashions” stock even after IPO listing.

As per our personal view if “Go fashions” IPO listing does above 900rs then It will be very expensive in regards of its company valuations. If “Go fashions” IPO list somewhere around 840rs then we may see some more upside in the stock. Price to sales ratios comes near 12.80 which is not much expensive.

Many people are comparing “Go fashions” company with Page industries which is not a good comparison because page industries is established brand and having total revenues are above 2800cr and If we will analysis total revenues of “Go fashions” then its only 400cr. It is very small company. Page industries had reported net profit of 340cr in March 2021 which is nearly to the total revenues of “Go fashions” Company.

We will suggest that if Go fashion stock trade above 900rs or above price levels after its IPO then it is better to book the profit.

 Question:

Should you buy Go fashion stock?

Answer:

We have advised our website sellers to invest money in always good IPO. Also which IPO is not good in our research, we also advise to avoid from investment point of view. The biggest question in the mind of the investors is that if the shares have been allotted in the IPO bidding, then hold or sell it after the IPO listing. IPO bidders who do not have shares allotment are always confused that if there is a bumper listing of any IPO, then should new investors buy the stock of that company or not?

As per our analysis Go fashion stock is going to be good investment pick for 2 to 3 years point of view but after its IPO listings valuations will be very high. It is advisable to our website viewers that if you want to invest in “Go fashions” stock after IPO listing then try to take entry on lower levels to minimize your investment risk factor. Indian stock market is trading at very higher valuations; we may see correction any time. In this case new listing IPO stocks we see more selling pressure as part of profit booking. In this situation try to accumulate well managed companies at lower level price levels at least 10% 15% correction from higher levels.  It is better to avoid new investment in Go fashion stock around 900rs or above any price levels. Valuations will be very high. It will be very risky.

From trading & Investment point of view keep strict stoploss of 850rs on closing basis If stock trade above 900rs levels.