Metro Brands Limited IPO: Opens tomorrow; find key details that investors must know before investing

Ace trader Rakesh Jhunjhunwala-backed footwear retailer Metro Brands Limited will launch its initial public offering (IPO) for subscription tomorrow, i.e., on Friday, December 9, 2021. The three-day initial share sale of the footwear retailer will close on Tuesday, December 14, 2021.

The company has fixed a price band of Rs 485-500 per equity share. The company has a plan to raise up to Rs 1,367.5 crore through the public issue at the upper price band.

A retail-individual investor can apply for a minimum of 30 equity shares and in multiples of 30 shares thereafter. Thus, the retail investors can make a minimum investment of Rs 15,000 for a single lot and their maximum investment would be Rs 1.95 lakh for 13 lots (390 shares).

The issue comprises a fresh issue of shares worth Rs 295 crore and an offer for sale (OFS) of up to 2,75,32,574 Equity Shares by promoters and other shareholders. The company will not receive any proceeds from the OFS part of the issue, while Rs 225 crore out of the net fresh issue proceeds will be used towards expenditure for opening new stores under the Metro, Mochi, Walkway and Crocs brands and for general corporate purposes.

About 50 per cent of the net issue is reserved for qualified institutional buyers, while 15 per cent and 35 per cent of the net issue is reserved for non-institutional bidders and retail investors, respectively.

Through the IPO the promoters will offload nearly 10 per cent stake. Promoters and the promoter group currently holds an 83.99 per cent stake in the company and post-IPO this stake will come down to around 74.27 per cent. Public holding will increase from the current 16.01 per cent to 25.73 per cent.

The company has been supported by Rakesh Jhunjhunwala as an investor since 2007. Jhunjhunwala is the third-largest shareholder in the company, owning a 14.73 per cent stake.

Issue Timeline

Bidding Period for the IPO: December 10-14, 2021.

Allotment: December 17, 2021.

Initiation of Refunds: December 20, 2021.

Credit of Shares to Demat Account: December 21 2021.

IPO Listing: December 22, 2021.

Axis Capital Limited, Ambit Private Limited, DAM Capital Advisors Limited, Equirus Capital Private Limited, ICICI Securities Limited Motilal Oswal Investment Advisors Limited are the Book Running Lead Managers of the issue while Link Intime India Private Limited is the registrar for it.

Metro Brands Limited is one of the largest Indian footwear speciality retailers, and are among the aspirational Indian brands in the footwear category. The company has opened its first store under the Metro brand in Mumbai in 1955, and have since evolved into a one-stop-shop for all footwear needs, by retailing a wide range of branded products for the entire family including men, women, unisex and kids, and for every occasion including casual and formal events. As of March 31, 2021, the company operated 586 Stores across 134 cities spread across 29 states and union territories in India.

The company has one subsidiary, being Metmill Footwear Private Limited and one joint venture, being M.V. Shoe Care Private Limited. Metro Brands operate on an asset-light model with third-party manufacturing through long-standing vendor relationships, optimum store size and layout, and long-term lease arrangements.

As of March 31, 2021, we marketed our products through two websites and dedicated pages in seven major Indian e-commerce marketplaces; and catered to our online orders through a designated operations area at our warehouse. Its retail operations are carried out through its stores and distributors as well as through online channels. It primarily follows the "company owned and company operated" ("COCO") model of retailing through our own Multi Brand Outlets ("MBOs") and Exclusive Brand Outlets ("EBOs"), to better manage customer experience at our stores.

It operates Metro, Mochi and Walkway branded MBOs and Crocs branded EBOs. The company and its subsidiary Metmill also operate shop-in-shops ("SIS") in major departmental stores across India. We also distribute products of third-party brands through MetMill and retail products through franchisees.

As of March 31, 2021, it had 2,691 permanent employees. It further works with 1,235 selling agents, their staff, and contract workers.