Ethos shares list at discount on BSE, NSE; stock falls 6% from IPO price on debut day
Ethos shares listed on the stock exchanges today at a discount to the IPO price amid the bullish market momentum. Shares of the company began trading on the NSE at Rs 825 per share, down 6% from the IPO price of Rs 836-878 apiece per share and on the BSE the stock debuted at Rs 830 apiece. The Rs 472 crore IPO was subscribed by investors earlier this month and was fully subscribed by all categories excluding retail investors. The company had a market capitalisation of Rs 1,937.99 crore on its market debut.
Ethos has a sizeable portfolio of premium and luxury watches in India, enabling it to retail 50 premium and luxury watch brands like Rolex, Omega, IWC Schaffhausen, Jaeger LeCoultre, Panerai, Bvlgari, Rado, Longines, Tissot. The company enjoys a market share of 13% in the ‘premium and luxury watch retail’ segment in India.
The research team at Anand Rathi Share and Stock Brokers had given a subscribe rating to the offer. Anand Rathi Research in its IPO note said, “At the high of the issue price-band (Rs878), the stock is valued at ~285x FY21 P/E and ~55x FY21 EV/EBITDA. We reckon a high and rising market share and unique brand partnerships to be positives.” However, in terms of risk, it noted “Reduction in discretionary spending, Covid-19 or any future pandemic, most of its suppliers being non-exclusive.”
In addition to the premium and luxury watch retail, it also undertakes retail of certified pre-owned luxury watches since Fiscal 2019. It has 50 physical retail stores in 17 cities in India in a multi store format, and offers an Omnichannel experience to its customers through its website and social media platforms.
The Indian Fashion Industry faced a shift in the late 1990s and early 2000s when International Luxury brands started retailing their products in Multi-Brand Outlets. In 2005, brands like Versace Collections and Corneliani signed their first full franchise agreement. Other luxury brands such as LVMH, Christian Dior, Fendi, Canali, Hugo Boss, Ferragamo, Armani, etc. followed suit when India’s first Luxury mall – Emporio opened in Union Territory of Delhi.