Rakesh Jhunjhunwala-backed Metro Brands' shares will make their market debut on Wednesday. Dealers said Metro Brands traded at a discount in the grey market, an unofficial market for unlisted securities, ahead of the listing of its shares on stock exchanges BSE and NSE. Mumbai-based Metro Brands is a multi-brand footwear retail chain.
This week, Metro Brands slipped into a discount in the grey market, they said.
Metro Brands GMP
|Date||GMP in rupees|
Source: IPO Watch
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"Metro Brands has shown growth, profitability and financial discipline in the past but the sector is widely underrated. The company has an asset-light business model and derives most of its revenues from third parties," said Aayush Agrawal, Senior Analyst at Swastika Investmart.
"We are seeing a change in the IPO sentiment amid a slight decline in the market, and the last two debutants witnessed profit booking post-listing... We are seeing a decline in the GMP for upcoming IPOs. We may see a discount listing of Metro Brands given that its GMP trades at a discount of 10-15 percent currently," he added.
The listing of Metro Brands on Dalal Street comes at a time when most IPOs have received a robust response from investors, though the recent correction in the market has dented the appeal of recent debutants.
"Metro Brands shares are available at a discount in the grey market, which indicates that the listing would be muted. We can see a listing at a discount of 15-20 percent to the issue price," said Gaurav Garg, Head of Research at CapitalVia Global Research.
The IPO of Metro Brands, backed by the Big Bull of Dalal Street, Jhunjhunwala, was subscribed an overall 3.6 times in the three-day bidding process from December 10 to December 14. During the period, the footwear retailer commanded a grey market premium (GMP) of Rs 25-80.
The portions reserved for QIBs and non-institutional investors were subscribed 8.5 times and three times respectively. The quota for retail investors was booked 1.1 times.
Metro Brands raised more than Rs 410 crore from anchor investors ahead of its IPO.
First Published: IST