A footwear company Metro Band’s IPO is now open for investors. The company intends to raise a sum of Rs 1,335.74 crore.
Utilization of the money raised :
- Expenditure for opening new stores of the company, under the ‘Metro’, ‘Mochi’, ‘Walkway’ and ‘Crocs’ brands
- General corporate purposes
About the company
Metro Brand is one of India’s largest footwear specialty retailers. They target the mid and premium segments in the footwear market that have a higher presence of organized players and growth in the overall footwear industry. It also offers accessories such as belts, bags, socks, masks, and wallets, at stores.
The company has been backed by Mr. Rakesh Jhunjhunwala as an investor since 2007.
Should we apply?
The metro band has two listed pears. 1. Relaxo footwear and 2. Bata India. Relaxo Footwears is the biggest player in the industry in revenue terms with total revenue of Rs 1,392.50 crore, followed by Bata India and Metro Brands. If we check the valuations, the valuations of Metro Band are on a higher side as compared to Relaxo and bata.
The Indian footwear consumption in value terms is expected to grow at a CAGR of 15% to 17% between FY22 and FY25.
Given the company’s strong product profile, asset-light business model, healthy margins, strong sentiment due to marquee investors but aggressive valuations, We recommend subscribing to this IPO. However, don’t expect great listing gains. At present, the GMP is around 20 which is very less.
Long-term investors with a risk appetite can subscribe to the IPO given the aggressive expansion plans of the company.
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