Ace investor Rakesh Jhunjhunwala-backed Metro Brands has decided to open its maiden public offer for subscription on December 10. The price band and lot size will be announced by the company next week.
This would be the third public issue getting opened for subscription in the coming week, after RateGain Travel Technologies and Shriram Properties.
The initial public offering of Metro Brands comprises a fresh issue of Rs 295 crore, and an offer for sale of 2,14,50,100 equity shares by promoters.
The offer for sale consists of 1,30,15,000 equity shares by the promoter selling shareholders, 84.2 lakh equity shares by promoter group selling shareholders, and the remaining 8,100 equity shares by other selling shareholders.
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The company has undertaken a private placement of 73,136 equity shares for Rs 3.29 crore. Accordingly, the fresh issue size was reduced from Rs 250 crore to Rs 246.7 crore. But thereafter, it has increased the fresh issue size to Rs 295 crore, the company stated in its prospectus.
Metro Brands, one of the largest Indian footwear speciality retailers, will utilise its net proceeds from fresh issue for opening new stores, under the 'Metro', 'Mochi', 'Walkway' and 'Crocs' brands, and general corporate purposes.
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As of September 2021, the company, having the third highest number of exclusive retail outlets in India in FY21, operated 598 stores across 136 cities spread across 30 states and union territories in India.
Metro Brands sells footwear under its own 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. It also retails footcare and shoe-care products at stores through joint venture, M V Shoe Care Private Limited.
Revenue from the sale of in-house brands and third-party brands in multi-brand outlets stores represented 69.24 percent and 30.76 percent of revenue from MBOs in fiscal 2021, respectively.
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Its profit declined significantly to Rs 64.62 crore in FY21 from Rs 160.57 crore in FY20 due to Covid-led lockdowns. Revenue dropped sharply to Rs 800.06 crore from Rs 1,285.16 crore in the same period.
In the six-month period ended September 2021, the company recorded a profit of Rs 43.07 crore against a loss of Rs 43.11 crore in the same period last year. Revenue surged to Rs 456 crore from Rs 176.54 crore during the same period.
Among shareholders, Rakesh Jhunjhunwala's wife Rekha Jhunjhunwala is the third largest shareholder in the company, owning a 14.73 percent stake, while promoter and promoter group owned 83.99 percent stake.
Axis Capital, Ambit, DAM Capital Advisors, Equirus Capital, ICICI Securities, and Motilal Oswal Investment Advisors are the book running lead managers to the issue.
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