shares of Rakesh JhunjhunwalaA day after a sluggish start in the stock market, backed Metro Brands continued to trade below its IPO issue price. Shares of the footwear retailer are currently hovering around 487 level compared to its issue price 500.
Analysts believe the Metro brand is fundamentally a good business. Divam Sharma, Co-Founder, Green Portfolio said that the company has a wide range of brands, a large pan-India presence with a brand appeal among aspiring consumer segments and an asset light model with high profit margins.
“From a valuation standpoint the company is trading at a one-year P/E of approximately ~82x, which we believe is on the higher side given the low revenue growth in the business. We are trading at a P/E of less than 50x Will wait to enter this business and advise our investors to wait for a good entry point once the stock price corrects.”
Initial Public Offering (IPO) of Metro Brand It was subscribed 3.64 times till the last day of subscription which opened on 10th December and closed on 14th December.
Amarjeet Maurya – AVP – Mid Cap, Angel One.
The Metro brand retails footwear such as Metro, Cobbler, Walkway, Da Vinci and Jay Fontini, as well as some third-party brands such as Crocs, Skechers, Clarks, Florsheim and FitFlop. Metro Brands also offers accessories like belts, bags, socks, masks and wallets at its stores.
“The company is operating on an asset-lighting model with third-party products marketing. However, due to the COVID pandemic, footwear exports have been badly hit with a decline of around 35%. Worldwide consumption is expected to decline again. We expect the Metro band to drop further 460-450 due to a weak outlook,” said Ravi Singh, Head of Research and Vice President, ShareIndia.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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