|IPO Note||Metro Brands Limited|
|Rs 485 – Rs 500 per Equity share||Recommendation: Subscribe|
Metro Brands Limited IPO Company Profile: –
Backed by Rakesh Jhunjhunwala, Metro brand is one of the largest Indian footwear speciality retailers operating on an asset light model with third-party manufacturing through long-standing vendor relationships, optimum store size and layout, and long-term lease arrangements. It is retailing footwear under its own brands of Metro, Mochi, Walkway, J. Fontini and Da Vinchi also certain third-party brands such as Crocs, Clarks, Skechers, , Florsheim, and Fitflop. It also offers accessories such as belts, socks, bags, masks and wallets. Company’s total Store count has grown from 504 in 116 cities to 586 stores across 134 cities during FY19-FY21 and to 598 stores across 136 cities as of September 30, 2021. It aims to utilize proceeds from the Fresh Issue to establish 260 new stores, under various formats.
Metro Brands Limited IPO Details –
|Objects of the issue||· Expenditure for opening new stores of the Company, under the “Metro”, “Mochi”, “Walkway” and “Crocs” brands (“New Stores”); and
· General corporate purposes
|Issue Size||Total issue Size -Rs. 1367.5 Cr.
Offer for Sale – Rs.1072.5 Cr.
Fresh Issue – Rs. 295 Cr.
|Face value||Rs.5.00 Per Equity Share|
|Issue Price||Rs. 485 – Rs. 500|
|Bid Lot||30 shares|
|Listing at||BSE, NSE|
|Issue Opens:||10th Dec, 2021 – 14th Dec, 2021|
|QIB||50% of Net Issue Offer|
|Retail||35% of Net Issue Offer|
|NIB||15% of Net Issue Offer|
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Check Metro Brands Limited IPO Allotment Status
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Metro Brands Limited IPO Financial Performance:
Metro Brands Limited IPO Shareholding Pattern:
|Shareholding Pattern||Pre- Issue||Post Issue|
|Promoters & Promoter Group||83.99%||74.27%|
Source: RHP, EWL Research
Metro Brands Limited IPO Strengths:
- Metro brands is one of the India’s largest pan India footwear retailers
- Have Wide range of brands and products catering to all occasions across all age groups and market segment
- Have Efficient operating model through deep vendor engagements and long-standing relationships
- Presence across multiple formats and channels
Metro Brands Limited IPO Key Highlights:
- Revenue from operations grew by of 5.6% in FY20 however declined 37.7% in FY21 due to the impact of COVID which again rebounded with strong 158% revenue growth in H1FY2..
- EBITDA Margin improved from 21.36% in FY21 to 24.43% in H1FY22.
- Realization per Unit was Rs.1381 in H1FY22, the highest among key players.
- Revenue of the company diversified across all region in India with South region represent highest 34.21% in total revenue.
- Top 50 vendors contributed 77.07% of total in-house products.
- In most of their arrangements for third party brands, they are required to pay for products only once these products are sold by the company.
Metro Brands Limited IPO Risk Factors:
- Premises of all stores and warehouses are leased and may fail to renew these leases on competitive terms
- Operate in highly competitive footwear retail market and rely on the continued demand for products
- Dependent on third-parties for the manufacturing of all the products it sell
Metro Brands Limited IPO Outlook:
Metro Brands is one of the largest Indian footwear specialty retailer, targets the mid and premium segments in the footwear market. It operates Metro, Mochi and Walkway branded MBOs (Multi Brand Outlets) and Crocs™ branded EBOs (Exclusive Brand outlets). CRISIL Research expects growth momentum in Footwear Industry to pick up and to reach an estimated Rs. 1.4 trillion by Fiscal 2025 from Rs. 1 trillion as of Fiscal 2020, growing at a CAGR of approximately 21% between Fiscal 2021 and 2025. Mid and premium segments in the footwear market expected to grow at a higher rate compared to the total footwear industry. Metro brands have better Net profit margins and highest average selling price compared to its peers. At the higher price band of Rs 500, the offer is made at P/E multiple of 210x of FY21 Post Issue EPS, which is in line compared to its peers Bata India and Relaxo. Considering the future growth prospects we recommend subscribe to the IPO.
Metro Brands Limited IPO FAQ
Ans. Metro Brands Limited IPO will comprise fresh share issue and new offer share issue. The company aims to go public to accelerate its growth and expansion plan.
Ans. The company will open for subscription on 10 December 2021.
Ans. The minimum lot size that investors can subscribe to is 30 shares.
Ans. The Medplus Health Services Ltd IPO listing date is 22 December 2021.
Ans. The minimum lot size for this upcoming IPO is 30 shares.
Ans. Link Intime India Pvt Ltd will be the registrar for this upcoming IPO.
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