Rakesh Jhunjhunwala-backed Metro Brands stock falls over 12% on market debut

Rakesh Jhunjhunwala-backed Metro Brands made a tepid market debut today. Shares of Metro Brands listed at a discount of 12.60% at Rs 437 compared to the issue price of Rs 500. The company offered its shares in a price band of Rs 485-500 per share.

Market cap of the firm stood at Rs 11,864 crore. Total 19.92 lakh shares of the firm changed hands amounting to a turnover of Rs 87.05 crore on the NSE.

Rekha Jhunjhunwala, wife of the ace investor, is the third-largest shareholder in the company, owning a 14.73 per cent stake.

On BSE, the stock listed at Rs 436, 12.80% lower to the IPO price.

Market cap of the firm rose to Rs 11,837 crore. Total 1.40 lakh shares of the firm changed hands amounting to a turnover of Rs 6.14 crore on the BSE.

The IPO was held from December 10 to December 14. The share sale was subscribed 3.64 times on the final day of bidding.

The offer received bids for 6.96 crore equity shares against an IPO size of 1.91 crore. The portion allocated for retail investors was subscribed 1.13 times and that of non-institutional investors saw 3.02 times subscription.

Qualified institutional buyers (QIBs) applied for 8.49 times the portion set aside for them.

The leading footwear retailer raised Rs 1,368 crore through the share sale. The firm raised a little over Rs 410 crore from anchor investors on December 9. The company allotted 82.05 lakh equity shares to anchor investors at Rs 500 apiece, taking the total transaction size to Rs 410.25 crore.

The IPO comprised fresh issue of equity shares worth Rs 295 crore and an offer for sale of 2.14 crore equity shares by promoters and other shareholders. Half of the issue size was reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 35 per cent for retail investors.

Lot size of the IPO was 30 shares for which one would have to spend Rs 15,000. A retail-individual investor could apply for up to 13 lots or 390 shares by spending Rs 1,95,000.The allotment of shares was finalised on December 17, 2021.

Link Intime India Private Ltd was the registrar to the IPO.

Proceeds of the issue will be used toward expenditure for opening new stores under the Metro, Mochi, Walkway and Crocs brands and for general corporate purposes.

Axis Capital, Ambit, DAM Capital Advisors, Equirus Capital, ICICI Securities and Motilal Oswal Investment Advisors were the book running lead managers to the IPO.

Currently, the company has 598 stores in 136 cities spread across India. Of these, 211 stores were opened in the last three years. The company sells footwear brands such as Metro, Mochi, Walkway, Da Vinchi and J Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim and Fitflop. It also offers accessories, such as belts, bags, socks, masks and wallets at its stores.