Baazar Style Retail share price jumps 8% after flat debut in Indian stock market. Buy, sell or hold?

Stock market today: Rekha Jhunjhunwala-backed Baazar Style Retail IPO had a flat listing on the BSE and the NSE during Friday's session. Baazar Style Retail's share price today is listed on the BSE at ₹389 apiece, whereas, on the NSE and the BSE, it is recording a flat listing on the Indian bourses. However, the newly-listed stock witnessed strong buying post-listing and touched an intraday high of ₹431.15 on the NSE and ₹430.95 on the BSE. While climbing to this intraday high, Baazar Style Retail's share price registered over 8 per cent, rallying against the listing price.

According to stock market experts, Baazar Style Retail's share price witnessed strong buying as the company's financials were strong. They said the company delivered a CAGR of 35.8% from 2017-24. So, those who have applied for the listing gain can book profit and exit on this rise, whereas allottees with medium to long-term perspectives can hold the scrip and maximize their returns.

Baazar Style Retail share price outlook

Advising short-term investors to book profit and exit, Prashanth Tapse, Senior Vice President of Research at Mehta Equities, said, "Despite pressure in the markets, Baazar Style managed to list in line with our expectations. Even though the valuation was higher with OFS's offer, Baazar Style received a decent 40x subscription demand, considering the market optimism at the time of offer bidding. Considering its business model, fast-changing fashion trends, and regional preferences remain a critical challenge, we recommended our investors to "SUBSCRIBE WITH RISK" We recommend allotted investors to choose to book profits on the listing."

On the suggestion to the long-term investors, Akriti Mehrotra, Research Analyst at Stoxbox, said, “As a leading one-stop shop in Eastern and North-Eastern India, BSRL has grown significantly, expanding its store count to 162 across nine states with a CAGR of 35.8% from 2017-24. This expansion has helped BSRL capture a 3.0% market share in West Bengal and 2.2% in Odisha within the organized value retail sector. The company's cluster-based strategy facilitated a 23% revenue increase, from ₹7,879 mn in FY23 to ₹9,729 mn in FY24, with 38% coming from private labels.”

"Net profit surged from ₹51 mn to ₹219 mn during the same period. Despite having a debt of ₹1,782 mn and facing risks like intense competition, shifting consumer trends, and reliance on apparel (84% of revenue), BSRL's growth and profitability enhancements make it a promising medium to long-term investment. Investors are advised to hold their position considering the company's robust financial performance and strategic growth initiatives," the StoxBox expert added.

Rekha Jhunjhunwala-backed IPO

As per the Red Herring Prospectus of Baazar Style Retail IPO, Rekha Jhunjhunwala has offered her 2,723,120 equity shares in this mainboard IPO. These offered shares aggregating to ₹1,05,92,93,680 or around ₹106 crore. According to the RHP of Baazar Style Retail IPO available on SEBI's website, Rekha Jhunjhunwala's name is on the list of Investor Selling Shareholders. She has offered her shares under the OFS route.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.