Metro Brands IPO: GMP, subscription status of Rakesh Jhunjhunwala-backed issue

Metro Brands IPO: As per the latest Metro Brands IPO subscription status, Rakesh Jhunjhunwala-backed public issue has been subscribed 52 per cent in retail category and 2 per cent in NII category, Avaneesh Parasar

Rakesh Jhunjhunwala-backed Metro Brands IPO opened for subscription on 10th December 2021 and it will remain open for bidding till 14th December 2021. After first day of bidding, the public issue worth ₹1,367.51 crore has been subscribed 27 per cent. As per the latest Metro Brands IPO subscription status, the public issue has been subscribed 52 per cent in retail category and 2 per cent in NII category. According to market observers, share of this Rakesh Jhunjhunwala holding company are trading at a premium of ₹30 in the grey market today.

Metro Brands IPO GMP

Market observers said that Metro Brands IPO GMP today is ₹30, which is ₹10 lower from its yesterday’s grey market premium (GMP) of ₹40. They said that the decline in grey market premium can be attributed to the tepid response from bidders on first day of bidding. However, they expected trend reversal in investors’ response to the IPO from Monday. They said that market sentiment is positive these days and it is going to play a major role in subscription status of the public offer.

What this GMP means?

Market observers said that GMP is an indication about the listing gain expected by the grey market. As Metro Brands IPO GMP today is ₹30, this simply means that grey market expects that Metro Brands IPO will list around ₹530 ( ₹500 + ₹30), which is at par with the price band of ₹485 to ₹500 per equity share.

Metro Brands IPO: subscribe or not?

Giving ‘subscribe for long term’ tag to Rakesh Jhunjhunwala-backed Metro Brands IPO; Choice Broking report says, “MBL (Metro Brands Limited) is one of the largest footwear retailers with around 3–4 per cent market share in the organized market space and assigned subscribe rating to the IPO. In FY21, whole footwear retailing was impacted by the pandemic-led restrictions. Thus, we have benchmarked the IPO valuation to the performance during FY19–20. At a higher price band of ₹500, MBL is demanding a P/E multiple of 89.2 (to its average earnings of ₹5.6 per share over FY19–20), which is a premium to peer average multiple of 71.7. It has reported strong financial performance with robust cash flow generation. The company is consistently paying dividends since FY2000. Thus, we assign a “Subscribe for Long Term” rating for the issue.”

The tentative date for share allotment is likely on 17th December 2021 and listing of shares is expected on 22nd December 2021.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Avaneesh Parasar.