Metro Brands Limited IPO

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(i) Metro Shoes is one of the largest Indian footwear speciality retailers, and are among the aspirational Indian brands in the footwear category (Source: CRISIL Report). They have opened their first store under the Metro brand in Mumbai in 1955, and have since evolved into a one-stop shop for all footwear needs, by retailing a wide range of branded products for the entire family including men, women, unisex and kids, and for every occasion including casual and formal events.

(ii) As of September 30, 2021, the Company operated 598 Stores (as defined below) across 136 cities spread across 30 states and union territories in India. They target the economy, mid and premium segments in the footwear market, which together are expected to grow at a higher rate compared to the total footwear industry between Fiscal 2020 and 2025. These segments have a higher presence of organised players and their growth in the overall footwear industry is expected to accelerate growth of the organized segment in the footwear industry (Source: CRISIL Report).

(iii) The Company had the third highest number of exclusive retail outlets in India, in Fiscal 2021 (Source: CRISIL Report). In Fiscal 2019, 2020, and 2021 and in the six months ended September 30, 2020 and September 30, 2021, they recorded an EBITDA Margin of 27.72%, 27.51%, 21.36%, (7.57)% and 24.43%, respectively (on a consolidated basis).

Brands of Metro Shoes

They sell retail footwear under the brands of Metro, Mochi, Walkway, Da Vinchi and J. Fontini, as well as certain third-party brands such as Crocs, Skechers, Clarks, Florsheim, and Fitflop, which complement the in-house brands. They believe these brands have a pan-India appeal across regions. They also offer accessories such as belts, bags, socks, masks and wallets, at the stores. They also retail foot-care and shoe-care products at the stores through the joint venture, M.V. Shoe Care Private Limited, making us a ‘one-stop-shop’ for all footwear and related accessories to the customers.

Objects of the Metro Brands Limited IPO:

The Offer comprises of the Fresh Issue and an Offer for Sale. Company propose to utilise the Net Proceeds towards funding the following objects: 1. Expenditure for opening new stores of the Company, under the “Metro”, “Mochi”, “Walkway” and “Crocs” brands (“New Stores”) 2. General corporate purposes

Metro Brands Limited IPO Details:

Open Date: Dec 10 2021
Close Date: Dec 14 2021
Total Shares: 27350200
Face Value: ₹ 5 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 1,367.51 Cr.
Lot Size: 30 Shares
Issue Price: ₹ 485 - 500 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 22 2021

Promoters And Management:

i. Rafique A. Malik is the Chairman of the Board. He holds a bachelor’s degree in commerce from Siddharth College of Commerce and Economics, University of Bombay. He has attended the Owner/President Management Program at the Harvard Graduate School of Business. He has secured 1st position in the ‘Ladies Shoes’ category and the 3rd position in the ‘Gents Dress Shoes’ category at the All India Fashion Parade and Design Competition for Leather, Leathergoods and Footwear, 1970, organized by the Indian Leather Technologists’ Association. He has been associated with the Company as a director since January 19, 1977. He has over 50 years of experience in the field of footwear retail. ii. Farah Malik Bhanji is the Managing Director on the Board. She holds a bachelor’s degree in arts and a bachelor’s degree in business administration from the University of Texas at Austin. She is presently attending the Owner/President Management Program at the Harvard Graduate School of Business. She has been associated with the Company as a director since December 5, 2000. She has over 20 years of experience in the field of footwear retail. iii. Mohammed Iqbal Hasanally Dossani is the Whole-time Director on the Board. He holds a bachelor’s degree in commerce, in Financial Accounting and Auditing (Special) from Smt. Mithibai Motiram Kundnani College of Commerce and Economics, University of Mumbai. He has also successfully completed ‘AESTHINT15: Rhetoric: The Art of Persuasive Writing and Public Speaking’, a course of study offered by HarvardX, an online learning initiative of Harvard University. Prior to his time with the Company, he has been employed with Schefata Pharmaceutical and Development Laboratories as a factory accounts manager and M/s Workforce Media Network as partner. He was first appointed as an additional director of our Company on November 26, 2020.

Financials of Metro Brands Limited IPO:

Particulars (in Millions) Mar 21 Mar 20
Revenue 8,001 12,851
Purchases of stock -in- trade 2,741 5,821
Changes in inventories of stock in trade 863 -115
Employee benefits expense 1,026 1,267
Other expenses 1,654 2,350
Operating profit 1,715 3,526
OPM % 21% 27%
Other Income 784 259
Finance Cost 436 395
Depriciation 1,218 1,206
Profit Before tax 845 2,184
Profit After Tax 664 1,612
EPS 2.43 6.05

Comparison With Peers:

Bata India and Relaxo Footwears have shown peers. Bata India is having Mcap of 25000 Crores and Relaxo Footwear has 33000 Crores. Metro Shoes coming up with Mcap of 13,500 Crores. Bata is currently trading at Mcap/Sales of 8.35x. Relaxo Footwear is currently trading at Mcap/Sales of 13x Metro Shoes is currently coming up with an IPO at Mcap/Sales of 16x.

Recommendation on Metro Brands Limited IPO:

Review and Recommendation of MetroBrands by InvestorZone is 5/10 1. Metro Shoes is one of India's largest pan India footwear retailers with a brand appeal among aspirational consumer segments in the fast-growing footwear retail industry. 2. Over the years, the asset light business model of the company with an efficient operating model leads to sustained profitable growth in the company. 3. Covid-19 has impacted the revenue last year. 4. The IPO pricing looks on higher side as compare to peers.

Registrar of Metro Brands Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Metro Brands Limited 401, Zillion, 4th Floor, LBS Marg & CST Road Junction, Kurla (West), Mumbai- 400 070, Maharashtra, India Phone: + (91) 22 2654 7700 Email: Website

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