Rakesh Jhunjhunwala backed, Metro Brands to open for IPO from 10 Dec 2021

Metro Brands to open for IPO

Metro is one of the largest Indian footwear specialty retailers and is among the aspirational Indian brands in the footwear category. The firm’s first store under the Metro brand in Mumbai in 1955, and have since evolved into a one-stop-shop for all footwear needs, by retailing a wide range of branded products for the entire family including men, women, unisex and kids, and for every occasion including casual and formal events. As of March 31, 2021, the company operates 586 Stores (as defined below) across 134 cities spread across 29 states and union territories in India.

The firm retails footwear under its brands of Metro, Mochi, Walkway, Da Vinchi, and J. Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop, which complement our in-house brands. The firm’s retail operations are carried out through our stores and distributors as well as through online channels. The firm also distributes products of third-party brands through MetMill and retail products through franchisees. MBOs, EBOs, SIS, and franchisees, operated by the company. As of March 31, 2019, 2020, and 2021, the Company-operated Stores with a total Retail Business Area of 643,442 sq. ft., 694,955 sq. ft., and 720,994 sq. ft., respectively.

Metro Brands IPO with an issue size of Rs 1367.51 crores,  is all set to open its window for IPO subscription from 10 December 2021. The last date to apply for the IPO  is 14 Dec 2021. The price band for the IPO is set at Rs Rs 485 to 500. Grey Market’s premium for the IPO is around Rs70 above the higher side of the price band. The issue is a combination of fresh issues of share and offers for sale. From the offer for sale worth Rs 1072.51Cr, the firm will not receive any proceeds. The net proceeds from the fresh issue worth Rs295 crores will be utilized for opening new stores of the company, under the “Metro”, “Mochi”, “Walkway” and “Crocs” brands.

Shares will be allotted on 17 Dec 2021. In case of non-allotment of shares to any investors, a refund for them will be initiated on 20 Dec,201 and finally, the shares will be listed on both the major exchanges NSE and BSE on 20th Dec 2021. 50% of the issue is reserved for qualified institutional investors and 35% for  Retail investors and the remaining 15% for high net worth individuals.  Retail investors can invest a minimum of Rs 15000, to buy one lot consisting of 30 shares and a maximum of Rs195,3000 to buy 13 lots adding to 390 shares. Axis Capital Limited, ICICI Securities Limited, Ambit Private Limited, DAM Capital Advisors Ltd (Formerly IDFC Securities Ltd), Equirus Capital Private Limited, Motilal Oswal Investment Advisors Pvt Ltd, will be acting as lead banking managers and investors can check their allotment status on the official website of Link Intime India private limited, acting as a registrar of the IPO.

The firm has competitive strength as mentioned in its DRHP, like, One of India’s largest footwear retailers, having a wide range of brands and products, efficient operating model, and asset-light business and presence across multiple formats and channels. On the financial front, the firm has continued to make a profit in the last three years, however, there was a drastic fall in the net profit in FY2021. The firm witnessed a fall in operating income by Rs 4325.30 million from Rs 13,110.68 million earned in 2020 to Rs 8,785.38 million earned in FY2021. Operating income shrunk by over 10% on a CAGR basis. Net profit for the brand also shrunk by a whopping 60% to Rs646.19 million in FY2021 from Rs 1605.75 million earned a year ago.

The company has a strong fundamental and finacial base, further backing of an investor like Rakesh Jhunjhunwala makes the firm lucrative for investment. But investors must do their homework before putting their hard-earn money into the market. As investment in stock markets are subject to market risk.

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