The offer has been subscribed 3.6 times at 5:00 pm. It saw applications for 6,96,12,480 shares against the issue size of 1,91,45,070, data on BSE showed.
The poor response is reminiscent of another Jhunjhunwala-backed issue that came last month — Star Health. The issue also saw an equally poor response from investors. It was eventually subscribed 79 per cent. Though, there is still hope for Metro Brands as QIB investors, who usually come on the last day, may bid in enough numbers to help it sail through.
The issue has majorly garnered positive recommendations on the issue but a few brokerages are skeptical over aggressive pricing, impact of Covid-19 pandemic on the business and high dependence on third party brands.
Marwadi Shares and Finance has recommended to subscribe to the issue as the company is one of India’s largest pan India footwear retailers with a strong brand appeal. It is available at a reasonable valuation as compared to its peers.
“Considering the TTM adjusted EPS of Rs 5.55 on a post-issue basis, the company will list at a P/E of 90.01 with a market cap of Rs 13,575.4 crore, while its peers- Bata India & Relaxo Footwear are trading at a P/E of 922 and 111 respectively,” it added.
The company is selling shares in the range of Rs 485-500 apiece. At the upper range of the price band, the company will fetch Rs 1,367.51 crore via its initial stake sale.
The footwear retailer on Thursday said it has collected a little over Rs 410 crore from anchor investors ahead of its IPO. The company has allotted 82.05 lakh equity shares to anchor investors at Rs 500 apiece, taking the total transaction size to Rs 410.25 crore, according to a BSE circular.
On a block, the issue consists of issuance of fresh equity shares worth Rs 295 crore whereas promoters and existing shareholders will offload 21,450,100 equity shares aggregating to Rs 1,072.51 crore.
Big Bull’s spouse Rekha Jhunjhunwala is the third-largest shareholder in the company, owning a 14.73 per cent stake.
Metro Brands retail footwear under their own brands of Metro, Mochi, Walkway, Da Vinchi and J. Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop, which complement their in-house brands.