Ethos IPOWhich has received bids for 41.38 lakh shares against 39.79 shares on offer 1.04 times subscription, is currently at a discount in the gray market, which points to a weak listing on Monday. The luxury and premium watch retailer has a gray market premium (GMP) minus Rs 5. The price band of the IPO was fixed at Rs 836 to Rs 878 per equity share.
Nature IPO GMP
As per ipowatch.com, Ethos shares are currently trading at a discount of Rs 5 on the upper band of Rs 878 in gray market. This means that the shares are trading at Rs 873 in the gray market. This indicates that the listing price of the company’s shares is, as of now, expected to be lower than the issue price. Premiums fluctuate based on sentiments in the markets. The listing of shares in the stock exchanges is scheduled to take place on Monday.
Ethos IPOs: Opinions of Experts
Ravi Singhal, Vice-Chairman, GCL Securities said, “Ethos Ltd shares may have a positive listing on Monday and in case of bears, it may get listed around Rs 885 to Rs 900 level, while in case of bulls , Ethos shares may get listed for around Rs 920 up to Rs 930 level.”
share India Ravi Singh, Vice President and Head (Research) said that the issue price of Ethos looks expensive compared to the performance of the company in the past one year. Current market conditions and valuations suggest that the IPO may be listed around the issue price or at a nominal discount.
“Investors can book their positions and wait for short-term gains or till the market sentiments stabilize to re-enter lower levels. A lot will depend on how the stock market opens on Monday.
ICICI Securities has said, “Despite following the asset light business model, high capital blockage in inventory (Inventory days: 170+) and low margins translated into reporting single digit ROE (~7-8%) for the company At the upper end of the price band, Ethos is valued at ~95x P/E on an annualized FY22E basis. Continued growth in profitable growth and improvement in the return ratio will be key to monitoring going forward.
Ethos IPO: Basic Details
The Rs 472 crore IPO, which was open for public subscription between May 18 and May 20, received bids for 41,38,650 shares, while 39,79,957 shares were offered, which translates to 1.04 times subscription. The share of non-institutional investors was subscribed 1.48 times, while the category of qualified institutional buyers (QIBs) was subscribed 1.06 times and retail individual investors (RIIs) 84 percent.
The company’s Ebitda (earnings before interest, tax, depreciation and amortization) margin ranged from 13 per cent to 2 per cent, while its PAT (profit after tax) margin ranged from 10 per cent to (-) 0.3 per cent in FY19-21. was. For the first nine months of FY22, revenue stood at Rs 420 crore and EBITDA margin came in at 10.9 per cent.
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