By Harshita Tyagi
The IPO of Rakesh Jhunjhunwala-backed footwear retailer Metro Brands Ltd will open for subscription this week on Friday (10 December), and it will close on December 14. The price band for the issue has been fixed at Rs 485-500 per share. The Metro Brands IPO market lot size is 30 shares. A retail-individual investor can apply for up to 13 lots (390 shares or Rs 195,000). The issue comprises fresh equity shares worth Rs 295 crore and an offer for sale (OFS) of 2.14 crore equity shares by promoters and other shareholders. At the upper end of the price band, the public issue is expected to fetch 1,367.5 crore.
About 50 per cent of the net issue is reserved for qualified institutional buyers (QIBs), whereas non-institutional buyers will have 15 per cent shares allocated for them. Retail portion has been fixed at 35 per cent of the offer.
Promoters to offload 10% stake
Through this IPO, the company’s promoters will offload nearly 10% stake. Currently, the promoters and promoter group hold an 84% stake in the company. In the OFS, promoters will sell 1.30 crores equity shares and the promoter group will offload 84.2 lakh equity shares. The company has been supported by Rakesh Jhunjhunwala as an investor since 2007. Jhunjhunwala is the third-largest shareholder in the company, owning a 14.73 per cent stake. Proceeds of the fresh issue will be used towards expenditure for opening new stores under the Metro, Mochi, Walkway and Crocs brands and for general corporate purposes.
In the financial year 2020-21, the company reported a revenue of Rs 800.06 crore with a net profit of Rs 64.62 crore, as opposed to Rs 1,285.16 crore and Rs 64.62 crore reported in the previous fiscal year. In the six-month period ended September 2021, Metro Brands recorded a net profit of Rs 43.07 crore and revenue of Rs 456 crore.
About Metro Brands
Metro Brands Ltd is one of the largest Indian footwear specialty retailers in India. Some of the company’s brands include Metro, Mochi, Walkway, Da Vinchi, and J. Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop.
As of September 30, 2021, the company operated 598 Stores across 136 cities spread across 30 states and union territories in India.
Strong competition from organised, unorganised footwear retailers
Axis Capital said in its IPO note, “Metro Brands face competition from organised as well as unorganised footwear retailers in India, and compete with different retailers for different aspects of their business. Their key competitors include Bata India Limited and Relaxo Footwear Ltd.” Axis Capital, Ambit, DAM Capital Advisors, Equirus Capital, ICICI Securities and Motilal Oswal Investment Advisors have been appointed to manage the issue. Link Intime India Private Ltd is the registrar for the IPO. The shares are proposed to be listed on BSE, NSE.