Metro Brands makes a tepid mkt debut
PremiumIt is the second company backed by Jhunjhunwala in a span of a month that has disappointed with a weak debut
MUMBAI : Footwear retailer Metro Brands Ltd, a company backed by ace investor Rakesh Jhunjhunwala, on Wednesday made a tepid stock market debut, opening trading at a 12.6% discount to its sale price of ₹500.
However, by the end of the trading session, the company’s stock staged a recovery and managed to close marginally above its issue price at ₹502 per share.
The three-day initial public offering (IPO) of the footwear retailer was subscribed 3.64 times on the last day of subscription that opened on 10 December and closed on 14 December.
The company retails its own footwear brands such as Metro, Mochi, Walkway, Da Vinchi and J Fontini, as well as certain third-party footwear brands such as Crocs, Skechers, Clarks, Florsheim and Fitflop.
Metro Brands also offers accessories, such as belts, bags, socks, masks and wallets at its stores.
Currently, Metro Brands has 598 stores in 136 cities spread across India. Of these, 211 stores were opened in the past three years.
Metro Brands is the second Jhunjhunwala-backed company in the span of a month that has disappointed investors with a weak market debut.
Investors, especially retail ones, have historically tended to follow Jhunjhunwala’s stock market bets in the hopes that they too can make a handsome profit by replicating the ace investor’s stock picks.
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Earlier this month, Star Health & Allied Insurance Co. Ltd, another Jhunjhunwala-backed company, saw its stock price fall below the issue price on listing day.
The Star Health stock began trading at ₹848, down 5.69%, from the issue price of ₹900.
On Wednesday, the Star Health stock closed at ₹799.95 on the NSE, still trading below its IPO price.
This followed a poor response to the Star Health IPO, where the company barely managed to reach the full subscription mark and had to settle with raising a lower amount than it had planned to.
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