Footwear retailer Metro Brands IPO announced tomorrow

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  • Shoe retailer Metro Brands IPO was open for subscription between December 10 and 14.
  • The company backed by Rakesh Jhunjhunwala received moderate investor interest as it was only subscribed to 3.64 times.
  • The company’s shares may experience a bad quote due to the low gray market premium and volatile market conditions.

Renowned investor Rakesh Jhunjhunwala, backed by Metro Brands, which is one of India’s largest specialty shoe retailers in India, is expected to go public tomorrow December 22.

The company’s shares may open at a reduced price, as indicated by the low gray market price and volatile market conditions. The company backed by Rakesh Jhunjhunwala received moderate investor interest as it was only subscribed to 3.64 times.

“We are seeing a change in the IPO [initial public offering] sentiment amid a slight market downturn, and the last two newbies have seen post-listing profit bookings, as well as we are seeing a decline in GMP [grey market price] for upcoming IPOs. We can see a list of Metro Brands discounts given that their GMPs are currently trading at a 10-15% discount, ”said Aayush Agrawal, senior analyst at Swastika Investmart.

Angel One analysts also expect Metro Brand shares to be low, but they maintain a positive stance for long-term investment.

“On listing day we expect a slightly low listing due to the already higher valuation of the company and the fear of [the] new COVID omicron variant (will increase possibility of lockdown). However, we are positive in the long term with light businesses, strong brands and a broad product line, ”said Amarjeet Maurya, assistant vice president – mid caps at Angel One.

In addition, the company’s financial performance in FY21 was not very good due to COVID-19 restrictions in the country which affected the entire shoe retail segment.

Its operational revenue fell 37.75% in FY21. In the meantime, it has permanently closed 24 stores, due to a significant drop in footfall due to COVID-19.

Blossoming graph

While the company’s fundamentals remain good with near-zero debt on its books and a generation of profits, the new COVID-19 variant could hurt its plan to grow in-store sales in the near term.

As of March 31, 2021, Metro Brands operated 586 stores in 134 cities in 29 states and union territories in India. Some of Metro’s brands include Mochi, Walkway, Davinchi, and J. Fontini, as well as some third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop.

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