Metro Brand IPO: Despite ace investor Rakesh Jhunjhunwala’s name being tagged with Metro Brands Ltd, its public offer received a slow response from investors. Public issue price in 3 days’ bid 1,367.51 crore got subscribed 3.64 times. Despite the Rakesh Jhunjhunwala tag, the shares of Metro Brands failed to impact the gray market as well. According to market experts, the shares of Metro Brands are trading at a premium. 22 in the gray market today.
Metro Brand IPO GMP
Metro Brands IPO is GMP today, market observers say 22, which is 3 less than yesterday’s gray market premium (GMP) 25. Metro Brand IPO Gray Market Premium Turning Around, Market Observers Say from 20 This is an indication that the Rakesh Jhunjhunwala-backed large public issue received a slow response from investors, reflected in its gray market performance. The high valuation could be another reason for investors not bidding for the issue and planning to enter it post listing, he added.
What does this GMP mean?
According to market observers, the listing profit from the GMP IPO is only conjecture by the gray market. Metro Brands’ IPO Is Today as GMP 22, it simply means that the gray market is expecting the shares of Metro Brands to be listed around 522, which is equal to its price band from 485 500 per equity share.
However, stock market experts say that the gray market premium varies daily and has nothing to do with the company’s financial position and balance sheet. It is completely unofficial and non-regulated by any organization. Therefore, gray market data should not be taken seriously. He advised investors to look at the balance sheet of the company as it gives a solid and clear picture of the fundamentals of the public issue.
Highlighting the fundamentals of the IPO of this Rakesh Jhunjhunwala-backed company, the Choice Broking report says, “MBL is one of the largest footwear retailers with around 3-4 per cent market share in the organized market and subscribed to IPOs. The ratings have been assigned. In FY2011, the entire footwear retailing was affected by the pandemic-led restrictions. Thus, we have benchmarked the IPO valuations for performance during FY19-20 at the higher price band of 500, MBL is demanding a P/E multiplier of 89.2 (its average earning 5.6 per share in FY19-20), which is a premium to the peer average multiple of 71.7. It has reported strong financial performance with strong cash flow generation. The company has been paying dividend continuously since FY 2000.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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