Ethos IPO: The initial public offering (IPO) of luxury watch retailer Ethos opened for subscription on Wednesday, May 18, 2022. The offer was subscribed 27 per cent by the end of the first day of bidding.
It received total bids for 10,71,000 shares across both the stock exchanges against 39,79,957 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 472.29 crore Ethos IPO will be available for subscription till Friday, May 20, 2022, and the price band of the company has been fixed at Rs 836-878 per share.
Ethos IPO comprises a fresh issue of shares aggregating to Rs 375 crore and an offer-for-sale (OFS) of up to 1,108,037 equity shares.
As a part of the OFS, Yashovardhan Saboo, KDDL, Mahen Distribution, Saboo Ventures LLP, Anuradha Saboo, Jai Vardhan Saboo, VBL Innovations, Anil Khanna, Nagarajan Subramanian, C Raja Sekhar, Karan Singh Bhandari, Harsh Vardhan Bhuwalka, Anand Vardhan Bhuwalka, Shalini Bhuwalka and Manju Bhuwalka will sell equity shares.
Ethos has the largest portfolio of premium and luxury watches in India and retails 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. Under the brand name Ethos, it opened its first luxury retail watch store in January 2003 in Chandigarh.
The net proceeds from the fresh issue will be used for repayment of debt, funding working capital requirements, opening new stores and general corporate purposes.
Half of the issue size has been reserved for qualified institutional investors (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.
Investors who wish to subscribe to Ethos IPO can bid in a lot of 17 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,926 to get a single lot of Ethos. The shares will be listed on both BSE as well as the NSE.
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, May 23, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered.
Emkay Global Financial Services and InCred Capital Wealth Portfolio Managers are the book running lead managers to the offer while KFin Technologies is the registrar of the issue.
Before heading into the IPO, Ethos on Tuesday raised over Rs 141.68 crore (Rs 1,41,68,50,550) from 9 anchor investors in lieu of 16,13,725 equity shares at Rs 878 each, data from the stock exchanges showed.
The anchor investors comprise ICICI Prudential Mutual Fund, Jupiter India Fund, Saint Capital Fund, Nomura Singapore and UPS Group Trust, among others.
The research team at Anand Rathi Share and Stock Brokers has given a “Subscribe” rating to the offer.
Anand Rathi Research in its IPO note said, “At the high of the issue price-band (Rs878), the stock is valued at ~285x FY21 P/E and ~55x FY21 EV/EBITDA. We reckon a high and rising market share and unique brand partnerships to be positives.”
However, in terms of risk, it noted “Reduction in discretionary spending, Covid-19 or any future pandemic, most of its suppliers being non-exclusive.”
The share allotment is likely to take place on Wednesday, May 25, 2022, and the shares are expected to be listed on Monday, May 30, 2022, according to the timeline given in the red herring prospectus (RHP).
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