The public offering of footwear retailer Metro Brands has subscribed 52 percent, receiving bids for 99.49 lakh equity shares against an IPO size of 1.91 crore on December 13, the second day of bidding.
Retail investors continued to provide good support to the issue, bidding for 87 percent of shares set aside for them, while the reserved portion of non-institutional investors was subscribed 17 percent.
Qualified institutional buyers portion booked 16 percent. The issue closes on December 14.
On its first day of bidding, December 10, the issue was subscribed 27 percent.
Also read - Metro Brands IPO. Should you subscribe to the issue?
Metro Brands aims to mobilise Rs 1,367.5 crore through its maiden public issue that comprises a fresh issuance of shares worth Rs 295 crore and an offer-for-sale of 2.14 crore equity shares by promoters. The net proceeds from the fresh issue will be used for expansion of new stores under its Metro, Mochi, Walkway and Crocs brands.
The price band for the offer is set at Rs 485-500 per equity share.
“At the upper price band, the stock is valued at a price/sales of 16.9x based on FY21 sales (on post-issue equity), which we believe is fully priced,” said BP Equities.
Also read - Metro Brands IPO: 10 key things to know about the issue, company
Metro Brand is a consumer-centric business led by a strong and experienced promoter (Rafique A Malik) with a proven track record of over 50 years. Despite the pandemic, the company’s total store count has grown from 504 stores across 116 cities as of FY19 to 598 stores across 136 cities as of September 30.
Also Read Moneycontrol’s Exclusive Research Note on Metro Brands IPO
“Metro plans to establish 260 new stores, which means higher capex and increased revenues in the longer run. The company enjoys superior financial performance when compared to its peers. Considering these factors, we give this issue a ‘subscribe’ rating only for listing gains,” said BP Equities.
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