Ethos shares make discounted debut. Buy, sell or hold?
Premium- Ethos shares listed on BSE at ₹830 whereas it it listed at ₹825 apiece levels on NSE
Ethos shares made a discounted debut at ₹825 per share levels on NSE and at ₹830 apiece on BSE, around 6 per cent lower from its upper price band of ₹878 per shares. However, weakness in the stock further continued as Ethos share price slipped below ₹800 levels making intraday low of ₹792 per share on BSE. According to stock market experts, Ethos shares were priced at higher valuations and weakness in the stock may continue for few more sessions. They said that the stock may go down up to ₹640 to ₹650 levels. They advised allottees to exit on major bounce back while they strictly advised positional investors to avoid any fresh position in the counter.
Speaking on Ethos share listing, Santosh Meena, Head of Research at Swastika Investmart Ltd said, "Ethos Limited has debuted at Rs. 828 i.e. 6% below its issue price. The company’s negative listing can be attributed to the rich pricing, current market sentiments, and lack of investor interest. The company is one of the largest sellers of luxury watches in India having a loyal customer base, omnichannel distribution network, long-standing relationships with the best luxury watchmakers, and experienced promoters."
Advising Ethos share allottees to exit on bounce back, Ravi Singhal, Vice Chairman at GCL Securities said, "Allottees are advised to exit on any strong rebound from its intraday lows while fresh investors should avoid taking any fresh position in the counter. The stock is looking weak and it may go down up to ₹640 to ₹650 apiece levels. Positional investors can review the status of Ethos shares at these levels and then only any position in the counter should be taken."
For those allottees who have a long-tern view on Ethos shares, Santosh Meena of Swastika Investmart said, "The high valuations, lack of exclusive agreements with watchmakers, inventory heavy operations make this issue suitable only for long-term investors having a high-risk appetite."
The public offer worth ₹472.29 crore had a fresh issue of equity shares aggregating to ₹375 crore and an offer for sale of up to 11,08,037 equity shares. Price band of the IPO was fixed at ₹836-878 per share.
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The largest luxury and premium watch retailer company has already made it clear that the proceeds from the fresh issuance will be utilised for repayment of debt, funding working capital requirements, opening new stores and general corporate purposes.