Mumbai Footwear retailer Metro Brands Ltd, a company backed by ace investor Rakesh Jhunjhunwala, opened the stock market on Wednesday with a discount of 12.6 per cent on its selling price. 500.
However, by the end of the trading session, the stock of the company recovered and managed to close marginally above its issue price. 502 per share.
The footwear retailer’s three-day initial public offering (IPO) was subscribed 3.64 times on the last day of subscription, which opened on December 10 and closed on December 14.
The company retails its own footwear brands such as Metro, Cobbler, Walkway, Da Vinci and Jay Fontini, as well as some third-party footwear brands such as Crocs, Skechers, Clarks, Florsheim and FitFlop.
Metro Brands also offers accessories like belts, bags, socks, masks and wallets at its stores.
Presently, Metro Brands has 598 stores in 136 cities spread across India. Of these, 211 stores were opened in the last three years.
Metro Brands is the second Jhunjhunwala-backed company in a month to disappoint investors with a weak market opening.
Investors, especially retail investors, have historically followed Jhunjhunwala’s stock market bets in the hope that they too can make a decent profit by repeating the stock picks of veteran investors.
Earlier this month, another Jhunjhunwala-backed company, Star Health and Allied Insurance Co Ltd, saw its share price below the issue price on the day of listing.
Star Health shares started trading at 848, down 5.69% from the issue price of 900.
Star Health shares closed on Wednesday 799.95 on NSE, still trading below its IPO price.
This was followed by a poor response to the Star Health IPO, where the company barely managed to reach the full membership mark and had to settle for raising funds less than it had planned.
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