Metro Brands IPO opened for subscription on 10th December 2021 and Rakesh Jhunjhunwala-backed company's public issue got subscribed 27 per cent of its offer on first day of bidding. The public issue worth ₹1,367.51 crore has been subscribed 52 per cent in the retail category and 2 per cent in the NII category. On account of such tepid response from investors, Metro Brands share price has dropped in grey market today. According to market observers, shares of Metro Brands are available at a premium of ₹40 in the grey market today.Metro Brands IPO GMPMarket observers said that Metro Brands IPO GMP today is ₹40, which is ₹20 lower from its Friday grey market premium of ₹60. They said that Rakesh Jhunjhunwala-backed public issue made its debut in the grey market in three figures but soon came down and hit double digit figure. However, in last two days, it has slipped further from ₹80 to ₹40 levels. They expected this GMP to recover from Monday when market reopens next week.What this GMP meanMarket observers said that GMP is an idea given by the grey market in regard to listing gain from the IPO. As Metro Brands IPO GMP today is ₹40, it simply means grey market expects this IPO to list around ₹540 ( ₹500 + ₹40), which is 8 per cent higher from its price band of ₹485 to ₹500 per equity share.Metro Brands IPO: Subscribe or not?Giving its review and 'subscribe' tag to this Rakesh Jhunjhunwala-backed company's IPO, Choice Broking report says, "MBL is one of the largest footwear retailers with around 3-4 per cent market share in the organized market space and assigned subscribe rating to the IPO. In FY21, whole footwear retailing was impacted by the pandemic-led restrictions. Thus, we have benchmarked the IPO valuation to the performance during FY19-20. At a higher price band of ₹500, MBL is demanding a P/E multiple of 89.2 (to its average earnings of ₹5.6 per share over FY19-20), which is a premium to peer average multiple of 71.7. It has reported strong financial performance with robust cash flow generation. The company is consistently paying dividends since FY2000. Thus, we assign a “Subscribe for Long Term" rating for the issue."Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.Never miss a story! Stay connected and informed with Mint. Download our App Now!!
