Rakesh Jhunjhunwala-backed Metro Brands shares tank on listing, stock debuts at 13% discount to IPO price

Rakesh Jhunjhunwala-backed footwear retailer Metro Brands share made a tepid debut on stock exchanges today.

Metro Brands shares began trading on the stock exchanges today. (Image: PEXELS)

Rakesh Jhunjhunwala-backed footwear retailer Metro Brands shares made a tepid debut on stock exchanges on Wednesday, 22 December 2021. Metro Brands stocks commenced trading at 436 per share, down Rs 64 or 12.8 per cent from the IPO price of Rs 500 per share. Metro Brands had a market capitalisation of Rs 11,837.72 crore on listing. The total size of the Metro Brands IPO was Rs 1,368 crore, of which Rs 1,073 crore was an offer for sale and Rs 295 crore was a fresh issue. The public issue received 3.6 times subscription. It saw applications for 6.96 crore shares against the issue size of 1.91 crore. Currently, Metro Brands has 598 stores in 136 cities spread across India. Of these, 211 stores were opened in the last three years. Metro Brands had the third highest number of exclusive retail outlets in India, in fiscal 2021.

The company has planned to utilise the proceeds of the fresh issue towards expenditure for opening new stores under the Metro, Mochi, Walkway and Crocs brands and for general corporate purposes.

Amarjeet Maurya, AVP – Mid Caps, Angel One has a positive view on stock for the long term on the back of asset light business, strong brands and wide range of products. “Every dip in share prices provides buying opportunities to long term investors,” he advised investors. 

Most of the brokerage house analysts such as Nirmal Bang, Hem Securities, Choice Broking, BP Equities, IDBI Capital had given subscribe rating to Metro Brands IPO. Religare Broking in its IPO note had said that the company is well placed to benefit from positive industry growth trends given its strong presence, a wide range of brands and products which cater to all occasions across age groups and market segments. Barring FY21, Metro has posted decent financials with healthy margins and returns profile.

ICICI Securities IPO note had stated that Metro Brands is among the aspirational Indian brands in footwear category which majorly caters to the economic to premium category of footwear. “It’s a play on consumers moving up the price pyramid from mass segment to economy, mid and premium priced segments,” it added. 

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