The initial public offering (IPO) of Rakesh Juhunjhunwala-backed Metro Brands, one of the largest Indian footwear specialty retailers, was subscribed 3.64 times on December 14, the final day of bidding.
The offer had garnered bids for 6.96 crore equity shares against an IPO size of 1.91 crore. The portion set aside for retail investors was subscribed 1.13 times and that of non-institutional investors saw 3.02 times subscription.
Qualified institutional buyers (QIBs), who with their expertise evaluate and invest in the capital markets, had booked 8.49 times the portion set aside for them.
The company offers footwear under Metro, Mochi, Walkway, Da Vinchi and J Fontini brands. It also offers some third-party brands such as Crocs, Skechers, Clarks, Florsheim and Fitflop.
The company follows the “company-owned and company-operated” (COCO) model of retailing through its multi-brand outlets (MBOs) and exclusive brand outlets (EBOs).
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The public issue saw 52 percent subscription on its second day of bidding on December 13.
Metro Brands, which operated 598 stores across 30 states and Union Territories in India, aims to raise Rs 1,368 crore through the IPO that comprises a fresh issue of Rs 295 crore and an offer-for-sale of Rs 1,072.5 crore by promoters.
The price band for the offer, which was opened on December 10 is Rs 485-500 a share.
The fresh issue money will be to open new stores under the Metro, Mochi, Walkway and Crocs brands.
Also read: Metro Brands IPO. Should you subscribe to the issue?
“Considering the trailing 12 months-TTM (September 2021) adjusted EPS of Rs 5.55 on a post-issue basis, the company is going to list at a P/E of 90.01 with a market cap of Rs 13,575.4 crore, while its peers like Bata India and Relaxo Footwear are trading at a P/E of 922 and 111, respectively,” said Marwadi Financial Services.
The brokerage has assigned “subscribe” rating to this IPO as the company is one of India’s largest footwear retailers with a brand appeal among aspirational consumer segments. “Also, it is available at reasonable valuation as compared to its peers,” it said.
Also read: Data Patterns India mobilises Rs 176 crore from anchor investors ahead of IPO
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