Metro Brands shares make weak listing on exchanges; debut at 13% discount to Rs 436

Shares of Rakesh Jhunjhunwala-backed Metro Brands made a weak debut on the bourses on Wednesday. Metro Brands shares started at Rs 436 per share on the BSE against the issue price of Rs 500 per share. The shares were listed at a discount of 12.80% or Rs 64 on the BSE.  

The market capitalisation of the footwear brand stood at Rs 11,837.72 crore at the listing.  

Earlier around 9.30 am, shares of Metro Brands were trading with a discount of 39% to Rs 305 per share, hinting at flat to the weak listing for the shares.  

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Earlier, the Initial Public Offer (IPO) was subscribed 3.64 times at 05:00 pm on the final day of the offer. It received 6,96,12,480 bids against 1,91,45,070 shares on offer for this issue.  

This is the second Jhunjhunwala-backed company that has seen weak listed on the exchanges. Earlier, Indian billionaire's backed company Star Health shares were listed at discount on the bourses.  

Metro Brands had offered 2.735 - 2.753 crore shares (fresh issue: 0.590 - 0.608cr shares; OFS shares: 2.145cr shares). The offer represents around 10.07% of its post-issue paid-up equity shares of the company. Total IPO size is Rs. 1,335.3 - 1,367.5 crore.  

The issue was a combination of fresh and OFS. The company will not receive any proceeds from the OFS part of the issue, while Rs 225 crore from the net fresh issue proceeds will be utilized to fund the expenditure for opening new stores of the company. 

As per the IPO details, as much as 50% of the net issue was reserved for qualified institutional buyers, while 15% and 35% of the net issue is reserved for non-institutional bidders and retail investors, respectively. 

Promoter currently holds an 83.99% stake in the company and post-IPO, which will come down to 74.27%.  Public holding will increase from the current 16.01% to 25.73%. 

MBL is among the top-5 footwear brands in India and is ranked fourth in the domestic footwear market (in terms of sales inFY21).  

Among the major footwear retailer, it has the highest net profit margin in FY21 and top performer in terms of operating margin during FY15-21. The company is among the aspirational Indian brands in the footwear category (i.e. catering to mid and premium segments) and thus have higher retail ASP than the average market, as per Choice Broking.