Chandigarh based luxury watch retailer, NatureReady to open its Initial Public Offering (IPO) today, May 18th to May 20th Ethos IPO This includes Rs 472 crore, which includes fresh issue of equity shares worth Rs 375 crore and Offer for Sale (OFS) of 11.08 lakh equity shares by the promoters and shareholders of the company. The company has a portfolio of over 50 premium and luxury watch brands such as Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, H. Moser & Cie, Rado, Longines, Baume & Mercier, Oris SA, Corum, Carl F. Bucherer, Tissot . , Raymond Weil, Louis Moinet and Balmain. It has a market share of 20 per cent in the exclusive luxury segment and 13 per cent in the total retail sales in the premium and luxury segment.
Ethos IPO: Price Band
The price band for the offer has been fixed at Rs.836-878 per equity share face value of Rs.10 each.
Post the issue, the promoter’s stake will come down to 19.36 per cent and 61.65 per cent from the 81.01 per cent stake he currently holds in the company.
Ethos IPO: Financials
The brokerage is optimistic about the company’s growth prospects as the Indian watch market is pegged at Rs 13,500 crore in FY20. It is expected to grow at a CAGR of ~10.6 per cent to reach Rs 22,300 crore in FY 2020-25. Behind many factors like higher brand consciousness, greater purchasing power, digitization and increasing urbanization.
According to a report by research firm Anand Rathi Research, the company’s revenue grew 3 per cent in FY 2010 and fell 16 per cent in FY 2011 (affected by Covid-19).
EBITDA (earnings before interest, tax, depreciation and amortization) margin ranged from 13 per cent to 2 per cent while PAT (profit after tax) margin ranged from 10 per cent to -0.3 per cent in FY19-21. For the first nine months of FY22, revenue stood at Rs 420 crore and EBITDA margin came in at 10.9 per cent.
Ethos IPO: Purpose
The largest luxury and premium watch retailer aims to use the net proceeds of the public offering to finance the repayment or prepayment of its loans, financing the company’s required working capital and capital expenditures to set up new stores.
Ethos IPO: Lot Size
One bidder will be able to apply in lot and one lot will consist of 17 shares of the company.
Ethos IPO: GMP Today
Shares of Ethos have yet to make their debut in the gray market. Hence, Athos IPO GMP is not available.
Ethos IPO: Should You Subscribe?
“At the high of the issue price-band (Rs 878), the stock is valued at 285x FY21 P/E and 55x FY21 EV/EBITDA and we view a high and growing market share and unique brand partnership as positive,” a report said. Research from Anand Rathi advised investors to ‘subscribe’ to the issue.
However, the brokerage highlights a reduction in discretionary spending, concerns over COVID-19 or a future pandemic, and most of its suppliers being non-exclusive.
According to Nirmal Bang Equity Research, going forward, the company is expanding its stores (13 new stores from the existing 50 stores in the next three years) and with new categories, they believe that Ethos can grow strongly. Is.
“We understand that the company is much smaller than other listed retail players and is focused on one category (currently), we believe there is room for growth in the future, and at current valuations, it looks attractive on EV/EBITDA. and based on EV/sales and hence, we recommend to “subscribe for longer term”, states a report by Nirmal Bang.
It has 50 physical retail stores across 17 cities in India and provides an all-encompassing experience to its customers through its website and social media platforms. There were 2.18 crore visitor sessions on the company’s website as of 31 December 2021.
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