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Ethos shares fall 9% on debut day despite robust market environment

In terms of volumes, Ethos traded with 26.37 lakh shares on the NSE, and 2 lakh shares on the BSE.

May 30, 2022 / 05:44 PM IST
 
 
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Ethos disappointed investors on its first day of trading on May 30, as the stock fell nearly 9 percent despite robust market conditions, impacted by subdued response to its IPO, high valuations, and doubts over sustainability of earnings performance at one of the largest watch retailers in the Indian premium and luxury watch industry.

The stock opened lower by 5.5 percent at Rs 830 and failed to surpass its issue price of Rs 878 throughout session. It corrected up to Rs 774 intraday and finally settled at Rs 802.60, down 8.6 percent from issue price and down 3.3 percent from opening price on the BSE.

On the NSE, it closed with 8.53 percent loss at Rs 803.1.

In terms of volumes, Ethos traded with 26.37 lakh shares on the NSE, and two lakh shares on the BSE.

The luxury and premium watch retailer raised Rs 472.3 crore through its IPO last week. The price band for the offer was at Rs 836-878 per share.

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"The company’s negative listing can be attributed to the rich pricing, current market sentiments, and lack of investor interest," said Santosh Meena, Head of Research at Swastika Investmart. The public issue was subscribed just 1.04 times during May 18-20.

The company is one of the largest sellers of luxury watches in India having a loyal customer base, omnichannel distribution network, long-standing relationships with the best luxury watchmakers, and experienced promoters. However, the high valuations, lack of exclusive agreements with watchmakers, inventory heavy operations make this issue suitable only for long-term investors having a high-risk appetite, said Meena.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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first published: May 30, 2022 05:44 pm
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