Ethos IPO: Issue opens today; Should you subscribe? This is Anil Singhvi,

Ethos IPO: The three-day initial public offering (IPO) of Ethos IPO opened for subscription on Wednesday, May 18, 2022 and will close on May 20 (Friday). The issue of luxury and premium watch retail player Ethos, which aims to raise Rs 472.3 crore at the top end of the price band, includes a new issue of equity shares totaling Rs 375 crore and an offer-for-sale (OFS) of up to 1,108,037 equity shares. The public issue has set a price of Rs 836-878 per share for this issue. At the top end of the price band, the public issue is expected to raise Rs 472.3 crore. Investors can bid for a minimum of 17 equity shares and then multiply by 17.

Meanwhile, with the issue opening today, what should investors do in Ethos IPO?

G Business Managing Editor said in his preview that the company is a profitable company backed by strong promoters and with a good financial track record. “It also has an asset light model and is a low-debt company that boasts of high-profile investors. However, it comes at an expensive valuation,” said the market guru.

Singhvi said the company has a low-margin trading business and revenue growth does not build much confidence. “Investors who take risks are advised to apply only,” the G Business Managing Editor added.

Meanwhile, echoing Singhvi’s recommendation, Marwari Financial Services has also recommended subscribing with caution rating.

Considering FY21 / FY22 (Annual) EPS Rs.2.48 / Rs.9.13 on the basis of post issue, the company is going to list at P / E of 354.36x / 96.17x with a market capitalization of Rs.20,501 million, it said. There is no listed company in India that engages in business like the company. We assign a “Subscribe (with caution)” rating to the IPO as the company stated in its IPO note that Marwani Financial Services, one of the top luxury watches in India, is an unichannel retail player.

“However, the price of the IPO is very high and the company must continue to grow its business at a high growth rate to justify its valuation, which warns us from a long-term perspective,” it added.

Earlier, Eths Ltd said on Tuesday that it had collected about Rs 142 crore from anchor investors before the initial sale of shares.

According to the BSE, the company has decided to allot 16,13,725 equity shares to anchor investors at Rs 878 each, bringing the transaction size to Rs 141.68 crore.

Investors include ICICI Prudential Mutual Fund, Jupiter India Fund, St. Capital Fund, Nomura Singapore and UPS Group Trust Anchor Investors.

As a part of OFS, Yashovardhan Sabu, KDDL, Mahen Distribution, Sabu Ventures LLP, Anuradha Sabu, Joy Vardhan Sabu, VBL Innovation, Anil Khanna, Nagarajan Subrahmanyan, C Raja Sekhar, Karan Singh Bhandal, Karan Singh Bhandar, Karan Singh Bhandar, Bhuvalka and Monju Bhuvalka will sell equity shares.

The purpose of the IPO

Proceeds from the new issue will be used to repay loans, finance working capital requirements, open new stores and for general corporate purposes.

Half of the issue size is reserved for qualified institutional investors, 35 percent for retail investors and the remaining 15 percent for non-institutional investors.

About the organization

Ethos has the largest portfolio of premium and luxury watches in India and has over 50 premium and luxury watch brands such as Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Corum, Carl F. Bucherer, Tissot, Raymond Weil, Louis Moinet and Balmain. Under the Ethos brand, it opened its first luxury watch store in Chandigarh in January 2003.

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