Metro Brands IPO

Rakesh Jhunjhunwala-backed footwear retailer Metro Brands Limited is one of the India’s Biggest footwear specialty stores, as well as one of the most coveted Indian footwear brands. Metro Brands IPO will hit the stock market in 10 December 2021.

About Metro Brands

Metro Brands Limited established their first Metro store in Mumbai in 1955, and since then, they’re  grown into a one-stop shop for all footwear requirements, selling a comprehensive selection of branded items for men, women, unisex, and kids, as well as for any occasion including casual and formal occasions.

Their Company operates 586 Stores (as described below) in 134 cities across 29 Indian states and union territories as of March 31, 2021.

Between Fiscal 2020 and 2025, they plan to focus on the economy, mid, and premium sections of the footwear market.

These Sections are anticipated to develop at a faster rate than the overall footwear industry.  There are more organised participants in these segments.

Growth

Metro Brands Limited had the third-highest number of exclusive retail locations in India in Fiscal 2021. They had an EBITDA Margin of 27.72 percent, 27.51 percent, and 21.36 percent in Fiscal 2019, 2020, and 2021, respectively.

In Fiscal 2019, 2020, and 2021, they had Realization per Unit of 1,321.29, 1,345.80, and 1,327.96, respectively, based on revenue from Total Product Sales divided by volume of Total Product Sales.

From Fiscal 2019 to Fiscal 2021, they had the best Realization per Unit of the two top players in India. They have the best operating margins among India’s major companies in Fiscal 2020.

In addition, they had the best net profit margin of 8.1 percent among footwear companies in 2021.

Brands & Other Business

They sell footwear under the Metro, Mochi, Walkway, Da Vinchi, and J. Fontini brands, and also third-party brands including Crocs, Skechers, Clarks, Florsheim, and Fitflop, which complement their own brands.

These brands, they feel, have pan-India appeal throughout geographies. Their outlets also sell items including belts, handbags, socks, masks, and wallets.

Through their joint venture, M. V. Shoe Care Private Limited, they also sell footcare and shoe-care goods in their stores, making them a one-stop-shop for all footwear and associated items for their consumers.

Their retail operations are conducted through its shops, partners, and internet platforms.

Business Approach

To better control consumer experience at their locations, we generally adopt the “company owned and company operated” (“COCO”) model of retailing via our own Multi Brand Outlets (“MBOs”) and Exclusive Brand Outlets (“EBOs”).

They run Metro, Mochi, and Walkway MBOs, as well as CrocsTM EBOs. In addition, their company and its subsidiary Metmill run shop-in-shops (“SIS”) in prominent retail stores in India.

MetMill also distributes third-party brand items as well as retail products via franchisees. MBOs, EBOs, SIS, and franchisees are collectively called to as “Stores” in the Draft Red Herring Prospectus.

All of their brands are featured and sold on a variety of prominent B2C and B2B marketplaces.

Metro Brands IPO

Metro Brands Limited, headquartered in Mumbai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of INR 250 crore value equity share & 21,900,100 Equity Shares on 20 August 2021.

The offer includes 250 Crore value equity shares fresh equity shares and There is an offer for sale (OFS) of 21,900,100 equity shares by the promoters mentioned in the DRHP.

They got approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market on 29 November 2021.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
		31-Mar-21	31-Mar-20	31-Mar-19
Total Assets		1,659.34	1,617.42	1,321.51
Total Revenue		878.54	1,311.07	1,236.90
Profit After Tax		64.62	160.58	152.73

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	2.43	2.43	3
Financial Year 2020	6.05	6.05	2
Financial Year 2019	5.75	5.75	1
Weighted Average	4.19	4.19

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

• In the fast-growing footwear retail sector, one among India’s leading pan-India footwear retailers with a brand appeal across aspirational client groups.
• Customers are loyal to a wide selection of brands and goods that appeal to all occasions across market categories.
• Deep vendor relationships and a TOC-based supply chain provide for an efficient operating strategy.
• Set up a light firm with a lean operational style that leads to long-term profitable development.
• Availability in a variety of formats and channels.
• Third-party brands wanting to expand in India can use this platform.
• Strong promoter background, as well as an experienced leadership team with a track record and a high level of staff ownership.
• Growth, profitability, and financial discipline have all been proven in the past.

Metro Brands IPO Peer Comparison

S. No.	Face Value	Company Name	PE
1	5	Bata India Limited	N/A
2	1	Relaxo Footwears Limited	99.07

Industry Peer data was obtained from the following source:. On July 12, 2021, the closing NSE price of these equity shares was collected from the NSE website.

Metro Brands IPO Details

IPO Opening Date	10 December 2021
IPO Closing Date	14 December  2021
Issue Type	Book Building
Face Value	5 per share
IPO Price	485 to 500 per equity share
Market Lot	30
Min Amount	15,000
Listing At	BSE, NSE
Issue Size	1,367.51 Cr
Fresh Issue	250 Crore
Offer for Sale	21,900,100 Crore

Metro Brands IPO Date

Metro Brands IPO opening date is 10 December  2021, and the closing date is 14 December  2021. The Metro Brands issue may list in 22 December 2021.

IPO Opening Date	10 December  2021
IPO Closing Date	14 December 2021
Basis of Allotment Date	17 December  2021
Initiation of Refunds	20 December 2021
Credit of Shares to Demat Account	21 December 2021
IPO Listing Date	22 December  2021

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	50	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	35	Minimum level of 1 lot, based on availability, for every shareholder.

Metro Brands IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Metro Brands IPO.

Metro Brands IPO GMP

Metro Brands IPO Grey Market Premium is 0.

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
21 December 2021	No Trade	No Trade	No Trade
20 December 2021	No Trade	No Trade	No Trade
19 December 2021	No Trade	No Trade	No Trade
18 December 2021	No Trade	No Trade	No Trade
17 December 2021	No Trade	No Trade	No Trade
16 December 2021	19	2600	300
15 December 2021	15	1600	200
14 December 2021	16	1100	100
13 December 2021	27	1900	200
12 December 2021	30	1300	150
11 December 2021	40	1700	200
10 December 2021	50	1700	200
09 December 2021	60	2500	250
08 December 2021	No Trade	No Trade	No Trade
07 December 2021	No Trade	No Trade	No Trade
06 December 2021	No Trade	No Trade	No Trade
05 December 2021	No Trade	No Trade	No Trade
04 December 2021	No Trade	No Trade	No Trade

Metro Brands IPO Review

You can avoid Metro Brands IPO for listing gains & You may apply for long term view.

Metro Brands IPO Risk

• The ongoing COVID-19 epidemic has had a substantial impact on their business, especially now and in the future.
• They may not be effective in maintaining and increasing brand visibility.
• All of their stores and warehouses are leased spaces.
• For the production of all of the items they sell, they rely on third parties.
• The selling of third-party brands accounts for a major amount of their revenue.
• Their company, directors, and promoters are the subject of ongoing legal actions. Any negative conclusion in these proceedings might have a negative impact on their company.
• Breakdowns in technology might interrupt their operations and have a negative impact on its company operations and financial condition.

Other Threats

• The rise of internet merchants may put pressure on prices, increase competition, and have a negative impact on their business.
• They may be unable to expand their business in semi-urban regions, which might be negative to their company.
• They work in a competitive market, and any rise in competition might hurt their bottom line.
• No impartial body has assessed their financial needs or the anticipated distribution of Net Proceeds.
• With the majority of their vendors, they do not have formal agreements or set conditions of trade.
• Their transportation requirements are met by other parties.
• Seasonality is a factor in their business. Lower revenues over the holiday season of any fiscal year may have a negative impact on their company.

Business Model

In their MBOs, they try to maximise their mix of in-house and third-party brands to increase client traffic, sales density, and gross margins. In Fiscal 2021, sales from in-house and third-party brands sold in their MBO stores accounted for 69.24 percent and 30.76 percent of their firm’s MBO revenue, respectively.

To address changing business trends, they use their deep knowledge of the retail footwear industry and data analytics to design and launch margin-enhancing in-house brands.

They actively pick their products with regional tastes in mind. Their diverse brand portfolio enables them to serve customers in the economic (501 to 1,000), mid (1,001 to 3,000), and premium (beyond 3,001) sectors.

Stores

The total number of stores in their company has increased from 504 in 116 locations as of March 31, 2019 to 586 in 134 regions as of March 31, 2021.

As of March 31, 2021, they have a pan-India presence via their Store network, which is distributed throughout 29 states and union territories in India, and they have launched 113 new MBOs (containing seven via franchising) and 98 new EBOs in the previous three fiscal years.

We’re also working to expand their Walkway brand’s retail footprint by partnering with franchisees.

Their firm manages outlets with total Retail Business Areas of 643,442 sq. ft., 694,955 sq. ft., and 720,994 sq. ft., correspondingly, as of March 31, 2019, 2020, and 2021.

Metro Brands IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Metro Brands IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
10 December  2021	1	0.00	0.02	0.52	N/A	0.27
13 December  2021	2	0.16	0.17	0.87	N/A	0.52
14 December 2021	3	8.49	3.02	1.13	N/A	3.64

Promoters

• Rafique A. Malik,
• Farah Malik Bhanji,
• Alisha Rafique Malik,
• Rafique Malik Family Trust
• Aziza Malik Family Trust

Promoters’ Holding

Pre Issue Share Holding	68.45%
Post Issue Share Holding