Mumbai-based footwear retailer Metro Brands had a disappointing debut as the stock listed at a discount of 12.80 percent to the issue price on December 22.
It was third weak debut in December after Rategain Travel Technologies and Shriram Properties.
The stock opened at Rs 436 on the BSE against the final offer price of Rs 500 per share, while the listing price on the National Stock Exchange was Rs 437.
The change in market sentiment in the past few days was one of the major reasons for the weak listing. Valuation concerns and lower-than-expected subscription figures also dampened the sentiment.
Click Here To Know All IPO Related News
The maiden public issue of Metro Brands was subscribed 3.64 times between December 10 and 14, with the maximum demand from qualified institutional buyers, who subscribed 8.49 times their reserved portion. Non-institutional investors bid for 3.02 times the allotted quota, while the retail portion was booked 1.13 times.
The Rakesh Jhunjhunwala-backed company has mobilised Rs 1,367.5 crore through its public issue at the upper price band of Rs 500 per share.
Most analysts had assigned a "subscribe" rating to Metro Brands' IPO given its strong financials and cash flow generation, along with plans for aggressive product portfolio expansion and store addition.
Also read - Snapdeal IPO: Key risk factors listed on draft papers filed for Rs 1,250-crore issue
Metro Brands has the third highest number of exclusive retail outlets in India at 586.
Metro retails its footwear under its own brands 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 the in-house brands.
Also read - Data Patterns IPO share allotment: Check status online, latest grey market premium, listing date
"We believe Metro’s aggressive plans on store addition and product portfolio expansion would cater to the growing demand in branded footwear and pave the way for sustainable earnings growth and improved operational parameters in future. We recommend subscribe," said IDBI Capital.
Metro Brands is one of the largest footwear retailers with 3-4 percent market share in the organized industry. "It has reported strong financial performance with robust cash flow generation. The company is consistently paying dividend since FY2000. Thus, we assign a “subscribe for long term” rating for the issue," said Choice Broking.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
