Metro Brands IPO opens today

Last updated on December 23rd, 2021 at 12:50 pm

Maharashtra -The initial public offering (IPO) of Metro Brands, the footwear retail company, has opened today, December 12, for a subscription. So far, the brand’s IPO has been subscribed 4 percent. The issue consists of the issuance of fresh equity shares worth Rs 295 crore. The promoters and existing shareholders will offload 21,450,100 equity shares amassing up to Rs 1,072.51 crore.

Metro Brands is selling shares in a range of Rs 485 – 500 per share. The upper range of the cost band will help the company fetch Rs 1,367.51 crore.

The Metro Brands is backed by India’s leading investor Rakesh Jhunjhunwala, with having following companies under its umbrella – Metro, Mochi, Da Vinchi, J Fontini, and Walkway. Additionally, it also has certain third-party brands like Crocs, Clarks, Sketchers, Fitflop, and Florsheim. It is the second company backed by the Big Bull, Rakesh Jhunjhunwala, that opened its IPO this year in December, followed by Star Health and Allied Insurance Company.

It is to be noted that Jhunjhunwala’s spouse Rekha Jhunjhunwala is the third biggest stakeholder in the company Metro Brands. She owns a 14.73 percent stake in the company.

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Now, the question arises on how rated is the IPO subscription! IPO for Metro Brands, in general, has gathered positive recommendations in the market but still, some brokerages raise their doubts over the aggressive pricing, impact of a pandemic on faring of business, and high dependence of the company on third party brands.

Marwadi Shares and Finance has recommended the issue subscription citing the company’s position of being India’s largest footwear retailer. A strong brand appeal is an added advantage. “Considering the TTM adjusted EPS of Rs 5.55 on a post-issue basis, the company will list at a P/E of 90.01 with a market cap of Rs 13,575.4 crore, while its peers Bata India & Relaxo Footwear are trading at a P/E of 922 and 111, respectively,” it added.

IDBI Capital said while advising the subscription, “We believe Metro’s aggressive plans on store addition and product portfolio expansion would cater to growing demand in branded footwear and pave the way for sustainable earnings growth and improved operational parameters in future.”

50 percent pf the company’s shares have been reserved for qualified international bidders. Furthermore, 15 percent is reserved for non-institutional bidders. For this issue, the retail portion has been decided as 35 percent.