Metro Brands IPO: The IPO of the leading footwear retail company Metro Brands has opened for subscription today. Investors can bid in the price band of Rs 485-500 per share for this IPO of Rs 1367.5 crore. Big Bull Rakesh Jhunjhunwala, also known as Warren Buffett of India, also has a stake in Metro Brands. Under this issue, new equity shares worth Rs 295 crore will be issued. Apart from this, the existing promoters and other shareholders of the company will sell 2.14 crore shares under the Offer for Sale (OFS). After the success of the IPO, the promoters’ stake in the company will be 75.9 per cent and Big Bull Rakesh Jhunjhunwala will hold 13.9 per cent.
The company has informed that before the IPO, it has raised about Rs 410 crore from anchor investors. Talking about the gray market, its shares are at a premium of Rs 40 over the issue price. In such a situation, most of the brokerage firms have given subscribe rating to this IPO.
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What is the opinion of market experts regarding investment
- In the financial year 2021, the entire footwear industry was badly affected due to the Corona epidemic. In such a situation, Choice Equity Broking has made FY 2020 as the basis for the valuation of IPO. With an issue price of Rs 500, the IPO is priced at 89.2x PE, which is at a premium to Pierce’s average of 71.7x PE. Apart from this, Metro Brands has a 3.4 percent share in the organized market space of the country, which is one of the largest footwear retailers. It has excellent cash flow generation and has consistently delivered dividends since FY 2000. Hence, analysts at Choice Equity Broking have given it a long subscribed rating.
- According to Marwari Financial Services, this IPO is available at a reasonable price compared to peers. According to Marwari Financial Services, it may get listed at 90.01x PE as per the upper price of the price band. It is one of the largest footwear brand retailers in the country and the IPO is also available at a reasonable price, so Marwari Financial Services has given it a subscribed rating.
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- Metro Brands has established itself as a major brand over the last 65-plus years and the management is working on a plan to open around 260 stores in the next three years. The business of this company has grown at a CAGR of 16-17 per cent (Compound Annual Growth Rate) in the last 10 years. According to Nirmal Bang Securities Private Limited, if its growth is going to continue in the future, then it can be invested in it for the long term.
- According to Angel One, the company’s Historil net profit growth is lower than that of Pearl Relaxo Footwears. In such a situation, the analysts of Angel One have given neutral rating to this issue.
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Metro Brands IPO Details
- The IPO of footwear retail company Metro Brands will be open till December 14.
- Under this IPO, new shares worth Rs 295 crore will be issued. The existing promoters and other shareholders of the company will sell 2.14 crore equity shares under the offer for sale (OFS). After this sale of shares, the promoters’ stake in the company will come down by about 10 per cent to 75 per cent.
- The price band for the issue has been fixed at Rs 485-500 per share.
- The lot size is 30 shares i.e. according to the upper price of the price band, retail investors will have to invest at least Rs 15,000.
- The face value per share is Rs 5.
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- 50 per cent of the issue has been reserved for Qualified Institutional Investors (QIBs), 15 per cent for Non-Institutional Investors (NIIs) and 35 per cent for retail investors.
- The allotment of shares can happen on December 17 and can be listed on the exchange on December 22.
- The book running lead managers to the issue are Axis Capital, Ambit, DAM Capital Advisors, Equirus Capital, ICICI Securities and Motilal Oswal Investment Advisors.
- The money raised through the sale of new shares will be used by the company to open new stores. These new stores will be opened under the brand names of Metro, Cobbler, Walkway and Crocs. Apart from this, the capital raised through the sale of new shares will also be used for general corporate purposes.
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Company related details
- Metro Brands opened its first store in Mumbai under the METRO brand in Mumbai in 1955 and now has 598 stores in 136 cities across the country. In the last three years, the company has opened 211 stores out of 598 stores across the country.
- This company sells footwear products for men, women, unisex and children.
- Metro Bonds sells products for all occasions including casual and formal events.
- Talking about the financial position of the company, in the financial year 2019, the company had a net profit of Rs 152.73 crore, which increased to Rs 160.57 crore in the next financial year 2020, but in the next financial year 2021, there was a sharp decline in the profit and the company got Rs 64.62 crore. There was a net profit of Rs.
(Article: Harshita Tyagi)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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