Ethos Limited IPO: Premium watch retailer files DRHP with Sebi - Top 10 things investors must know

Chandigarh-based luxury and premium watch retailer Ethos Limited has filed its Draft Red Herring Prospectus (DRHP) for its initial public offering (IPO) with Securities and Exchange Board of India (Sebi).

Investors must know these top 10 things about the company and its IPO:

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1) IPO issue size: the issue comprises of fresh equity shares aggregating up to Rs 400 crore, as per the draft papers.

2) Objective of the IPO: The proceeds from its fresh issuance worth Rs 29.89 crores will be utilised for the repayment or prepayment of borrowings, in full or part of all or certain borrowings for the company, Rs 236.75 crore for funding working capital requirements, Rs 33.27 crore for financing established of new stores, Rs 1.98 core for financing upgradation of ERP and general corporate purposes.
3) IPO Price Band: IPO of up to equity shares of face value of Rs 10 each, as per DRHP.

4) IPO offer details: According to the draft papers, the company will offer an offer for sale (OFS) of up to 1,108,037 equity shares. Additionally, the company, in consultation with the lead bankers to the issue may consider a further issue of equity shares including a private placement aggregating up to Rs 50 crore. If such placement is completed, the fresh issue size will be reduced.

5) Lot size and minimum & maximum order: The offer of sale comprises up to 2,75,000 Equity Shares by Yashovardhan Saboo, up to 5,00,000 Equity Shares by KDDL Limited, up to 50,000 Equity Shares by Mahen Distribution Limited, up to 1,50,000 Equity Shares by Saboo Ventures LLP, up to 60,000 Equity Shares by Anuradha Saboo, up to 15,000 Equity Shares by Jai Vardhan Saboo, up to 10,500 Equity Shares by VBL Innovations Private Limited, up to 6,250 Equity Shares by Anil Khanna, up to 19,231 Equity Shares by Nagarajan Subramanian, up to 10,556 Equity Shares by C. Raja Sekhar, up to 3,000 Equity Shares by Karan Singh Bhandari, up to 2,125 Equity Shares by Harsh Vardhan Bhuwalka, up to 2,125 Equity Shares by Anand Vardhan Bhuwalka, up to 2,125 Equity Shares by Shalini Bhuwalka and up to 2,125 Equity Shares by Manju Bhuwalka.

6) Book Running Lead Manager and registrar: Emkay Global Financial Services Limited and InCred Capital Wealth Portfolio Managers Private Limited are the Book Running Lead Managers and KFin Technologies Private Limited is the registrar to the issue.

7) Company details: Ethos has the largest portfolio of premium and luxury watches in India and retail to 50 premium and luxury watch brands like Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain.

8) Market share: Ethos enjoys a healthy market share of 20% in the luxury watch retail segment and 13% in the premium and luxury watch retail segment in India.

9) Revenue: The company’s revenue from operations stood at Rs 386.57 crore for the fiscal 2021, while its net profit was Rs 5.78 crore for the same period. For the six months ending September 2021, revenue from operations was Rs 223.31 crore and net profit was Rs 3.75 crore.

10) Valuation: The Watch Market in India was valued at Rs 13,500 crore in FY 2020 and is expected to grow at a CAGR of 10.6 per cent to reach Rs 22,300 crore by FY 2025, on back of factors like increased discretionary spend on watches category, opening of more organized channels of purchase like MBOs and online marketplaces and vertical specialists, increased penetration of smartwatches in mid to premium category, omnichannel market organization etc.