May 18, 2022
By: bhakti.makwana@timesinternet.in
Credit: Ethos
Chandigarh-based luxury watch retailer opened its ₹472 crore IPO for subscriptions from today, May 18. It will close on May 20. The price band is set at ₹836-878 per share.
Credit: Flourish chart
The company is a luxury watch retailer with a portfolio of 50 premium and luxury watch brands including Omega, IWC Schaffhausen, Panerai, Bvlgari, Rado, Longines, Tissot, Raymond Weil, Louis Moinet and Balmain.
Credit: Flourish chart
The IPO proceeds will be used towards repayment of debt, funding working capital, capex for establishing new stores and upgrading existing stores.
Credit: Investopedia
Ethos made a profit of ₹5.78 crore in FY21 as against a loss of ₹1.33 crore in FY20. However, its revenue has been on a decline for the last three fiscal years.
Credit: Flourish chart
It has 50 physical retail stores in 17 cities in India and offers an omnichannel experience to its customers via website and social media platforms. As of December 31, 2021, the company's website had 2.18 crore visitor sessions.
Credit: Canva
Analysts are skeptical as the company’s financial performance has not improved meaningfully in the recent years. Some say that all the positives are already factored in the valuations.
Credit: Canva
Analysts say Ethos is a very small company focused on one category as compared to other listed retail players. However, they believe there is scope for growth in future as it is expanding its stores in the next three years.
Credit: Canva
The grey market believes that the stock might list at a discount – below its lower price band of ₹836, due to weak market conditions.
Credit: BCCL
There is a lot of selling pressure in the market by large foreign investors, which has taken a toll on equity markets in the last two months. High inflation, sudden rise in interest rates, Russia Ukraine war impacting supply of essential commodities are some reasons for the volatility.
Credit: BCCL