Ethos IPO subscribed 44% on Day 2; Retail portion booked 68%

The Initial Public Offering (IPO) of Chandigarh-based Ethos Limited, luxury and premium watch retail player, received bids of 17,61,557 shares against the offered 39,79,957 equity shares, at a price band of Rs 836-878, according to the data available on the stock exchanges. Overall, the issue was subscribed 0.44 times on the first day of bidding.

Retail investors portion was the most subscribed with 0.68 times, followed by non-institutional investors which witnessed a subscription of 0.25 times. Portion set aside for Qualified institutional investors was subscribed 0.19 times. The issue kicked off for subscription on Wednesday, May 18 and will be open till Friday, May 20.

Analysts from Nirmal Bang and Hem Securities feel that Ethos Ltd is a perfect candidate for long-term investment due to its market dominance in terms of no of stores, strategic locations and brand portfolio, long standing relationship with luxury watch brands and access to a large luxury customer base.

Going forward, growth is expected to be derived from store expansion (13 new stores over 50 existing in next three years), entry into leveraging other luxury segments (luggage, jewellery) leveraging its leadership position of luxury watch market and scaling its pre-owned luxury watches, a segment which is still miniscule in the country and were the company enjoys a first mover advantage.

Pre-IPO, the company did a placement to Sunil Singhania led Abakkus which invested Rs 25 at Rs 826 per share via its Growth Fund 2, a SEBI registered Category III AIF.

On Tuesday, Ethos Limited raised Rs 141.68 crore from 9 anchor investors i.e ICICI Prudential FlexiCap Fund, Jupiter India fund, Saint Capital Fund, Cohesion MK Best Ideas Sub-Trust, Jupiter South Asia Investment Company Limited- South Asia Access Fund, Coeus Global Opportunities Fund, Alchemy Leaders of Tomorrow- Closed ended fund Series 2, UPS Group Trust, Nomura Singapore Limited ODI, who were allotted 15,22,186 equity shares at the upper price band of Rs 878 per share.

Emkay Global Financial Services Limited and InCred Capital Wealth Portfolio Managers Private Limited are the Book Running Lead Managers and KFin Technologies Private Limited is the registrar to the Issue. The equity shares of the company are proposed to be listed on BSE and NSE.